29) Causes and Consequences of the Great Depression

Question 1

Consequences of the 1929 Stock Market Crash

Answer 1

• Loss of confidence in the stock market
• Reduction in the output of manufactured goods
• Decline in investment in capital goods

Question 2

Overproduction and underconsumption

Answer 2

• Companies overproduced consumer goods

- Consumers did not have enough money or credit to purchase goods

Question 3

Decline in farm prosperity

Answer 3

• Depression of the prices of agricultural products during the 1920s was a sign of economic weakness

Question 4

New Deal

Answer 4

Three Goals: Relief, Recovery, Reform

• FDR favored direct federal relief for individuals
• Reform program that sought to restructure American capitalism rather than replace it with a socialist system

Question 5

First 100 Days of the New Deal

Answer 5

• Restoring public confidence in the banking system
• Creating new jobs in the public sector to reduce unemployment
• Raising farm prices by restricting agricultural production
• Providing mortgage support for homeowners

Question 6

Agricultural Adjustment Act (AAA) (1933)

Answer 6

• Purpose was to raise farm prices by limiting agricultural production
• National system of crop controls and offered subsidies to farmers who agreed to limit the production of specific crops

Question 7

National Industrial Recovery Act (NRA)

Answer 7

• Sought to combat Great Depression by fostering government-business cooperation
• Allowed business to regulate themselves through codes of fair competition
• Did NOT succeed

Question 8

Civilian Conservation Corps

Answer 8

• established a jobs program for unemployed youth

Question 9

Social Security Act of 1935

Answer 9

• Created a federal pension system funded by taxes on a worker’s wages
• Guaranteed an income for the unemployed and retirees

Question 10

Wagner Act of 1935 / National Labor Relations Act

Answer 10

• Ensured workers’ rights to organize and bargain collectively
• Led to dramatic increase in labor union membership

Question 11

Works Progress Administration (WPA) (1933)

Answer 11

• Helped put unemployed Americans back to work in return for temporary financial assistance
• WPA workers built highways, schools, hospitals, airports, playgrounds

Question 12

Securities and Exchange Commission (1934)

Answer 12

• Established to regulate the commerce in stocks, bonds, and other securities
• Prior to no controls, frauds and other schemes existed