(Originais Teachy 2024) - Question Medium of History

The 1929 crisis, which originated in the United States, reverberated globally, deeply affecting economies of various countries and imposing a long period of recession and economic instability. Its trigger was the collapse of the New York Stock Exchange, but its roots can be found in phenomena such as overproduction and rampant speculation. In the post-World War I context, European economic recovery was largely linked to the ability to export to the US, making them vulnerable to the effects of the crisis. In Brazil, the consequences were mainly felt in the coffee market, which represented the country's main source of foreign exchange at the time. Regarding this scenario, historian John Kenneth Galbraith wrote: 'Prosperity does not create collapse. It only creates the basis for collapse.' (Galbraith, The Great Crash 1929). Based on the excerpt and your knowledge, answer: (1) How did overproduction and speculation in the US contribute to the outbreak of the 1929 crisis, and how did these factors affect the world economy? (2) Evaluate Galbraith's statement in light of economic principles and Brazil's experience during the crisis, considering the role of coffee in the Brazilian context.