What was one of the primary reasons for the decline in world trade during the Great Depression?

• A. Increased competition
• B. Imposition of protective tariffs
• C. Technological advancements
• D. Expansion of global markets

Answer: (B)

The primary reason for the decline in world trade during the Great Depression was the imposition of protective tariffs. During this economic crisis, many countries sought to protect their own economies by raising tariffs on imported goods. This was intended to encourage consumers to buy domestic products rather than foreign ones, thereby supporting local industries. However, these protective measures led to a significant decrease in international trade as other nations retaliated with their own tariffs, creating a cycle of escalating trade barriers. The result was a contraction in global trade volumes, making it much harder for countries to export goods and recover economically during the Great Depression. This situation was exacerbated by the overall economic instability that caused countries to turn inward rather than engage in trade.