USA faced its worst economic crisis in the l93-s. This crisis is often described as the Great Depression. The depression lasted for a decade, and affected the entire economy. The reason for the depression can be traced back to the 1929s, when there was great inequality in the distribution of wealth, and heavy speculation on the stock market in USA. Though the GDP increased from $191.3 billion in 1923 to $39 billion in 1929, the disparities between the haves and havewnots widened, and this created instability in the economy. According to a study done by the Brookings Institute, in 1929, the top 0.1% of Americans had a combined income equal to the income of the bottom 42% of the population. The top 9.1% of Americans in 1929 controlled 34% of all savings, while 30% of Americans had no savings at all. The owner of the Ford Company, Henry Ford, was reported to have a personal income of $14 million in the same year when the average personal income was $951!]. The reason for this dispmty can be traced back to the wages being paid. Though productivity increased in all the sectors of the economy, wages did not increase proportionately. Thus the increase in profit was not shared between the employer and employees, and meant an increase in income disparity. There was a great increase in speculation in the late l92s, with larger stuns being invested in the stock market than ever before. Stock prices rose at a tremendous rate and some investors became rich overnight by buying and selling stocks. With the economy booming, goods were available on credit, and middle class people started buying goods on credit and with installment payments. This increased the demand for goods in the market, and producers increased production. But as wages did not increase, the purchasing power of the people slowed down and demand began to fall. Poor demand led to reduction in the volume of production and a number of employees were thrown out of their jobs. This trend was widespread, and soon 25% of the population was unemployed. The situation became worse when the prices of agricultural products went down and farmers were unable to repay their loans. All these factors led to a fall in the stock market. The economy started to recover during the Second World War. During that time USA supplied arms to the countries involved in the war. Moreover, the USA had enlisted more than [D million men and women into the military. Many people also worked in factories to make the supplies for the war. In this way, the economy started growing gradually, as employment was generated in the economy. QUESTIUNS FDR DISCU SSI'UN: LDiscuss the reasons for the Great Depression in the US in the 1939s. 2.Ekplain how government intervention helps an economy to recover