Australia was heavily dependent on foreign investment and overseas markets for exports like wool and wheat. When the Great Depression hit, it severely impacted Australia as export prices collapsed, overseas loans dried up, and spending on public works decreased. This caused unemployment to rise dramatically, reducing demand for goods and services across the economy. While the 1920s saw economic growth in Australia, this prosperity was built on borrowed money and protective tariffs. As a result, Australia's economy could not withstand the downturn, and living standards fell sharply for most Australians during the Depression.

1. Australia and the 1930s The Great Depression A SUMMARY