Final answer:
The Depression of 1920–1921 led to a significant increase in the unemployment rate. The consequences were exacerbated by the Hawley-Smoot Tariff of 1930, which intended to reduce foreign imports but resulted in retaliatory tariffs that further diminished international trade and employment.
Step-by-step explanation:
The Depression of 1920–1921 resulted in a sharp increase in the unemployment rate. Following the depression, the unemployment rate jumped dramatically as businesses struggled and were forced into bankruptcy. The Hawley-Smoot Tariff Act of 1930, while intended to protect American farmers and manufacturers by imposing high tariffs and thereby reducing foreign imports, actually backfired by causing other countries to retaliate with tariffs of their own. This led to a significant decline in international trade, further exacerbating the unemployment situation.
As foreign trade sank, many US banks began recalling loans from abroad, causing additional financial crises internationally. This protectionist stance, with the intention of stimulating domestic industry, only deepened the global economic downturn. Moreover, the Hawley-Smoot Tariff not only failed to spur domestic production but also worsened unemployment as industries could not afford to export goods to European markets, which were imposing their own tariffs in response.