Depression


 * 1 Weimar Republic**


 * impact of the Great Depression on Germany

__**5.1 The Weimar Republic and the Great Depression**__


 * Causes of the Great Depression in Germany**
 * The strength of the economy was built on foreign loans; reparations were also paid from these loans. Germany had a negative balance of trade.
 * Germany began to experience an economic decline from 1928, when the stock market boom in America caused less money to flow to Europe. Interest rates rose to attract investment, causing less economic activity. Unemployment rose: 1½ million at the start of 1929, 3 million by the end.


 * What impact did the Great Depression have on Germany?**
 * The collapse of the American economy from September 1929, brought a sudden collapse of economies world-wide, including Germany.
 * By 1932, 6 million unemployed.
 * The government responded by cutting expenditure and raising taxes which made the situation worse.
 * The social hardship led to political instability as people looked for answers in the extreme left and right parties.