Answer :
The major effect of the Great Depression and the New Deal on America was expanded government intervention into new areas of social and economic affairs and the creation of more social assistance agencies at the national level.
The Great Depression was the major factor that forced the government to change its role after 1929.
Further Explanation:
Stock market crash in 1929 was the landmark that marked the start of several issues like unemployment, deflation, poverty, high consumer debt. The industries which suffered most were shipping, mining, agriculture. The Automobiles were very hard hit. The Great Depression has a major impact on political administration of the country. It caused many political changes.
The programs like relief and recovery were instituted. The Government used stimuluspackages, social security and Keynesian economics were used. Banks were given orders to liquidate the money, this increase the money supply in themarket. This contracted the economy that results in a decline un investment. Then the US government engaged in expansionary monetary policies.
Interest rates were raised that attracted international investors. These investors bought foreign assets. US increased the gold standard. They adopted a tight monetary policy.
All the steps were taken by Franklin Roosevelt. Then with all these reforms employment increased, the banking system improved and the USA became the superpower again in the multipolar world.
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Answer Details:
Grade: High School
Subject: Political Science
Keywords: Stock market Crash, Stimulus packages, Social security, Keynesian economics, liquidate money, expansionary monetary policies, international investors, tight monetary policy.
