cause of the great crash

Question 1

weakness in agriculture

Answer 1

• After WW1 large amounts of food, meat, and cotton around the world caused prices to go down
• Exports declined while production was increasing due to technological advancements such as the diesel powered tractor
• Droughts and dust bowls killed crops and some lost entire farms

Question 2

weakness in coal mining industry

Answer 2

faced competition from oil and natural gases

Question 3

weakness in railroads

Answer 3

cars existed

Question 4

affect of overproduction

Answer 4

prices and demands to fall
(The companies that provided raw materials and transportation also suffered such as steel, rubber, glass, petroleum)

Question 5

unstable banking industry

Answer 5

• drastic changes in the economy
• People feared an economic recession and withdrew money from banks

Question 6

effects of the credit card

Answer 6

• The idea of the middle class surrounded around keeping up with new products
• Speculation and buying on margin

Question 7

speculation and buying on margin

Answer 7

• risky investments where stocks could either increase or decrease greatly. When stock prices deflated, many had negative returns and therefore a lot of debt.
• Speculation involved buying 10% of a stock and loaning the other 90% from a bank. The process relied on the growth of the stock to cover the money that was loaned out and still make positive returns.
• many had accumulated debt

Question 8

Dow Jones Index grew by 400% from 1921 to 1929. what was the effect?

Answer 8

growth in stock market was inflated

Question 9

mass production of cars

Answer 9

cars produced every 10 seconds by assembly line

Question 10

Overproduction in agriculture led to declines

Answer 10

• Decreased prices
• Farmers could not afford to send their crops to supermarkets
• Incomes fell, and so did the economy