Chapter 17 Quiz Flashcards
What was Herbert Hoover’s campaign slogan?
“Two cars in every garage.”
What political party was Herbert Hoover apart of and when was he elected?
A republican, elected in 1928.
When did the stock market crash?
October 29th, 1929.
What is the NYSE?
New York Stock Exchange.
How many stocks were sold when the stock market crashed?
About 16 million.
What is margin buying?
When you put down a small payment them borrow the rest of the money from a stock broker. These stock brokers borrowed the money from the banks.
Why were so many stocks sold at once?
Because everyone maxed out their investments and stock prices were unrealistically high. A sell off began to cover loans to brokers who in turn defaulted on loans to the banks. When the banks closed, everyone with money in the bank lost it all.
Example of a ripple effect from the Great Depression:
People stopped buying radios. Those who made radios were out of work. They stopped purchasing products to produce the radios such as glass copper, etc. People who mad glass were now out of work.
Other factors that contributed to the damaged economy:
Underconsumption
High protective Tariffs
Installment buying
Underconsumption:
Not enough people to buy products
High protective tariffs:
Twenty-five foreign countries retaliated by decreasing their purchase of US products. Some US factories even moved their factories out of the country leading to fewer jobs in the country.
Installment buying:
To make a down payment then pay off loans monthly. Enabled everyone to buy at once. Then everyone bought and purchases dropped off. This reduced demand and drove prices down. Led to factories to cut production and lay off workers.
How were the farmers affected?
Hit hard. Grew more then they could sell. Prices went down. Defaulted on their loans. People were starving while gamers burned grain, dumped milk, slaughtered animals in the hope of reducing supply and raising prices.
What did Hoover give banks and businesses to help? What was his hope? Why didn’t he give direct help to the unemployed?
Hoover gave money to the banks and businesses hoping the benefits would “trickle down” to the masses. He didn’t give direct help to the unemployed believing it’d destroy their sense of self worth, ambitions, etc.
What was Hoover’s campaign slogan changed to?
“To families in every garage.”
