WORLD HISTORY

Detailed explanation-1: -Consider a recession, a period of low economic activity. With lower demand for goods and services, firms start laying off workers and at the same time refrain from raising prices. So unemployment rises and inflation falls during recessions.

Detailed explanation-2: -The contribution to the economy which can be made by employed people gets cancelled. It is a wastage of human resource and human capital. It increases the economic overload of the country. It increases poverty and makes the standard of living low as unemployed people have to adjust themselves to little earnings.

Detailed explanation-3: -During a depression, the unemployment rate spikes into double-digits and demand for consumer goods collapses. Companies usually slow production or shut down factories to compensate, and investment activity dries up. As a result, GDP and other measures of economic activity experience deep contractions.

Detailed explanation-4: -On July 8, 1932, the Dow Jones Industrial Average fell to its lowest point during the Great Depression. This event was symptomatic of a decade of economic uncertainty that was precipitated by the crash in the fall of 1929, when U.S. stock prices declined dramatically.

Detailed explanation-5: -Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.