Causes of the Great Depression

…

…because of people withdrawing their funds from the market. A working economy relies on a circular flow of money; my spending becomes part of your earnings, and your spending becomes part of my earnings. With the crash of the stock market and the failure of the banks, people became frightened. They pulled out their funds in order to protect their livelihoods. This resulted in a breakdown of the circular flow of money. Hence, a depression.