The Great Depression
- Unemployment rates reached 25% and massive deflation struck America
- Franklin D. Roosevelt made the New Deal and spent billions of dollars into the American economy during his presidency from 1932-1945
- In the 1930s, the unemployment rates were enormous. However, the 1930s was also marked by heavy deflation (graph below)
- Because of this increased spending from the federal government around the early 1940s, unemployment rate shot down to around 5%.
- However, also because of the increase spending, the massive deflation rates shifted to inflation as shown in this graph (1940s)
- We can also see that even before the Great Depression (1910-1920s), when the unemployment rates were lower, the inflation rates spiked.
