How did the Great Depression reshape economies, governments, and ideologies between the wars?
Topic 7.4 Economy in the Interwar Period: the economic crises between the wars, especially the Great Depression, and the varied government responses, including increased state intervention and the rise of authoritarian regimes.
A focused answer to AP World History Topic 7.4, explaining the interwar economy: the Great Depression and its global spread, the varied government responses from the New Deal and Keynesian intervention to Soviet command planning and fascist autarky, and the political consequences.
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What this topic is asking
Topic 7.4 covers the economy between the world wars, above all the Great Depression. It asks you to explain the causes and global spread of the Depression and the varied government responses to it - from democratic intervention like the New Deal, to Keynesian economics, to Soviet command planning, to fascist economic policy - and the political consequences of the crisis, including the rise of authoritarian regimes.
What the interwar economy was
The Great Depression
The crisis was global and severe.
Varied government responses
States intervened, but in very different ways.
- Democratic intervention and Keynesianism. The United States New Deal under Roosevelt used public works, relief, and regulation to fight the slump. It reflected the ideas of John Maynard Keynes, who argued governments should spend to boost demand and employment, a major shift from free-market orthodoxy.
- Soviet command planning. The Soviet Union, largely outside the capitalist world economy, pursued state-run five-year plans to industrialize rapidly, avoiding the Depression's unemployment but at enormous human cost.
- Fascist economics. Germany and Italy used heavy state direction, public works, and rearmament to reduce unemployment while suppressing unions and dissent.
The common thread was a vastly expanded role for the state in the economy, a lasting change.
Political consequences
Economic crisis reshaped politics.
The Depression's misery had grave political effects. Where democracies seemed unable to deliver recovery, authoritarian and fascist movements promised jobs, order, and national renewal, and gained power - most consequentially the Nazis in Germany. Economic despair thus helped destroy fragile democracies and bring to power regimes that would drive the world toward the Second World War (Topic 7.5). The interwar economy is therefore a crucial link between the two wars.
Try this
Q1. Name the United States programme of public works, relief, and regulation launched to fight the Great Depression. [Recall]
- Cue. The New Deal.
Q2. Explain one political consequence of the Great Depression. [Short explanation]
- Cue. The economic despair and apparent failure of democracies helped authoritarian and fascist movements gain power by promising jobs and order, most consequentially the Nazis in Germany, which contributed to the outbreak of the Second World War.
Exam-style practice questions
Practice questions written in the style of College Board exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
AP 2019 (style)3 marksBriefly describe ONE cause or feature of the Great Depression. Briefly explain ONE government response to it. Briefly explain ONE political consequence of the economic crisis.Show worked answer →
A Short Answer Question (SAQ), 3 points, one per bullet.
A. Describe: the Great Depression was a global economic collapse beginning around 1929, marked by mass unemployment, bank failures, and a sharp fall in trade and production.
B. Government response: many governments increased state intervention, as in the United States New Deal, with public works and relief programmes to revive the economy.
C. Political consequence: economic despair helped authoritarian and fascist movements gain power, as in Germany, by promising recovery and order.
Each bullet must be concrete.
AP 2021 (style)6 marksEvaluate the most significant effect of the Great Depression in the period c. 1900 to the present.Show worked answer →
A Long Essay Question (LEQ), scored on the 6-point causation rubric.
Thesis (1): "The most significant effect of the Great Depression was the dramatic expansion of the state's role in the economy worldwide, from the New Deal to command planning, though its role in enabling fascism and helping cause the Second World War was equally profound."
Contextualization (1): situate the Depression in the fragile, interconnected postwar global economy.
Evidence (2): mass unemployment and collapsing trade; the New Deal and Keynesian intervention; Soviet five-year plans; fascist economic policy and rearmament.
Analysis (2): explain HOW the crisis expanded state economic intervention everywhere, then add complexity by weighing that against its role in fuelling fascism and the road to war.
Related dot points
- Topic 7.5 Unresolved Tensions After World War I: the political and social tensions left by the peace settlement, including the Treaty of Versailles, the mandate system, anticolonial movements, and the rise of fascism and authoritarianism.
A focused answer to AP World History Topic 7.5, explaining the tensions left after the First World War: the harsh Treaty of Versailles and German resentment, the mandate system and broken promises to colonized peoples, the rise of fascism and authoritarianism, and the weakness of the League of Nations.
- Topic 7.6 Causes of World War II: the causes of the Second World War, including the legacy of the First World War, the Great Depression, fascist and militarist expansion, and the failure of appeasement and collective security.
A focused answer to AP World History Topic 7.6, explaining the causes of the Second World War: the legacy of Versailles and the Great Depression, fascist and militarist expansion by Germany, Italy, and Japan, and the failure of appeasement and the League of Nations.
- Topic 5.8 Reactions to the Industrial Economy from 1750 to 1900: the ideological, political, and labor responses to industrial capitalism, including socialism, Marxism, labor unions, and government reform.
A focused answer to AP World History Topic 5.8, explaining the reactions to industrial capitalism: socialism and the Marxism of Marx and Engels, labor unions and strikes, government reforms regulating work, and utopian and anarchist alternatives.
- Topic 8.4 Spread of Communism After 1900: the spread of communism through revolution and the varied paths and effects of communist movements, including the Russian and Chinese revolutions and their economic and social policies.
A focused answer to AP World History Topic 8.4, explaining the spread of communism: the Russian and Chinese revolutions, the policies of Stalin and Mao including collectivization and the Great Leap Forward, the human costs, and communism's varied paths and effects worldwide.
- Topic 9.5 Economics in the Global Age: the economic changes of globalization, including free-market neoliberalism, multinational corporations, free-trade agreements, and the rise of new economic powers.
A focused answer to AP World History Topic 9.5, explaining economics in the global age: the spread of free-market neoliberalism, the rise of multinational corporations and global supply chains, free-trade agreements and blocs, and the emergence of new economic powers like China and India.
Sources & how we know this
- AP World History: Modern Course and Exam Description — College Board (2020)