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U.S History I > consumer economy quiz > Flashcards

consumer economy quiz Flashcards

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1
Q

increased spending + larger profits for businesses = ?

A

bigger wages

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2
Q

what are the factors that fuel the consumer economy

A
  1. higher wages
  2. new products
  3. clever advertising
  4. lower costs
  5. widespread availability of credit
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3
Q

in 1920 - 1929 americans owned..

A

40% of world’s wealth

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4
Q

the average annual income rose

A

35%

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5
Q

example of the new products

A

the automobile

  • built up cities, liberated isolated rural family
  • model T - by Henry Ford
  • assembling line
  • automobile making became nation’s biggest single manufacturing industry
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6
Q

manufacturing process in which each worker does one specialized task in the construction of the final product

A

assembly line

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7
Q

the more products made, the…

A

less each one costs

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8
Q

clever advertising…

A

ad agencies hired psychologists to study how to appeal to people’s desire for youthfulness, beauty, health, and wealth

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9
Q

buying on credit

A
  • most americans paid cash for everything

- expensive things were paid for with installment plans

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10
Q

customers make partial payments over a period of time until debt is paid

A

installment plan

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11
Q

what did the installment plans do

A

fueled the growth of consumer spending

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12
Q

clever advertising did what

A

made installment plan acceptable to public

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13
Q

economic danger signs

A
  1. uneven prosperity
  2. personal debt
  3. playing the stock market
  4. too many goods, too little demand
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14
Q

uneven prosperity?

A

mainly the rich that got richer

-government tax policy contributed to imbalance

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15
Q

personal debt?

A
  • installment plans and buying on credit became customary

- spending beyond means

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16
Q

playing the stock market?

A
  • speculation : making high - risk investments in hopes of getting a huge return
  • buying on margin
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17
Q

allowed investors to purchase a stock for only a fraction of its price and borrow the rest

A

buying on margin

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18
Q

too many goods, too little demand

A

country’s warehouses were overstocked

consumers could not afford to buy goods as fast as assembly line turned them out

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19
Q

an average of stock prices of major industries

A

Dow Jones Industrial Average

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20
Q

what is a stock?

A
  • putting your money directly into a company
  • you own a stake in the company, called a “share”
  • value of your share changes as stock market changes
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21
Q

Stock Markets peak?

A

sept 3

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22
Q

company’s earning and assets

A

real value - prices rose above their real value

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23
Q

black Thursday date?

A

Oct 23

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24
Q

Black Thursday

A
  • dow jones average dropped 21 points in a hour

- investors began to sell shares, prices fell

25
Q

black Tuesday date?

A

october 29

26
Q

Black Tuesday

A

a record 16.4 million shares were sold

  • collapse of stock market - Great Crash
  • November 13 - overall losses totaled $130 Billion
27
Q

a span in which the economy grows then contracts

A

the business cycle

28
Q

effects of the crash

A
  1. Risky loans hurt banks
  2. consumer borrowing
  3. bank runs
  4. bank failures
  5. savings wiped out
  6. cuts in production
  7. rise in unemployment
  8. further cuts in production
29
Q

how did the risky loans hurt the banks

A

businesses were unable to repay loans after crash

30
Q

what was consumer borrowing

A

the installment plans back fired

- customers did not have cash to pay banks

31
Q

bank runs?

A

people rushed to make withdrawals

- banks could not get money fast enough to keep up

32
Q

bank failures?

A

bank runs + unpaid loans = bank failures

33
Q

savings wiped out?

A

banks wiped out any savings people had

34
Q

cuts in production

A

businesses could not borrow money to produce goods

-no incentive to make things since people had no money

35
Q

underlying causes of the depression

A

unstable economy - wealth unevenly distributed, industry produced more than they could sell
over speculation - buying stocks with borrowed money
government policies - federal reserve limited money supply, too little money in circulation

36
Q

an item of value that a borrower agrees to give up to the lender if the borrower cannot repay the loan

A

collateral

37
Q

social effects of the depression

A
  • poverty
  • Hoovervilles - shelters, mocked president hoover who was blamed
  • dust bowl - destroyed farms
38
Q

a consumer economy depends on what

A

a large amount of spending by consumers

39
Q

Americans pull together while surviving the depression

A
  • the American spirit of perseverance comes together

- many saw others worse off then themselves, even if they were in a difficult circumstance

40
Q

Farmers would bid pennies on land and machines auctioned by banks in order to help struggling neighbors

A

Penny auctions

41
Q

Farmers sticking together?

A

When a farmer was unable to pay the mortgage, local farmers secretly met and agreed to keep bids low, buyers than would return farms and equipment back to original owners

42
Q

Many states passed laws to stop the..

A

Foreclosure of farms

43
Q

Riding the rails

A

Many young people left home looking for work
They illegally rode trains
Called hobos
Had own symbols

44
Q

How many hobos lived on the road

A

250,000

45
Q

Depression humor

A

President Hoover was ridiculed
“Hooverville”
Hoover blankets-newspapers used to keep warm
Hoover flags-empty pockets turned inside out

46
Q

Prohibition is….

A

21st amendment – repealed prohibition
Prohibition lasted 15 years
-control of alcohol is returned to states, 8 states still ban it

47
Q

End of a era

A
  • Al Capone was arrested and convicted of tax evasion
  • former president Coolidge dies
  • babe Ruth retires
48
Q

The election of 1932

A

Republican-Hoover

Democratic - Roosevelt (FDR)

49
Q

Hoovers ideas

A

Federal government could not and should not fix people’s problems

50
Q

Roosevelt’s ideas

A

Federal government should step in to help Americans

51
Q

Hoover fails

A

Public begins blaming him and republicans

52
Q

Agricultural marketing act 1929

A

Passed before depression

  • relief for farmers - tried to help stabilize prices of farm crops
  • failed - sent farm prices down
53
Q

An attempt to protect domestic industries from foreign imports - highest import tax in history

A

Hawley-smoot tariff

54
Q

Government gave credit to a industries such as railroads, banks, and insurance companies

A

Reconstruction finance corporation

  • this backfired
  • Americans felt money was only going to business people and ordinary people were left struggling
55
Q

Veterans march on Washington

A
  • vets and families march
  • Hoover ordered general MacArthur to clear road
  • used force against marchers, guns were drawn on our servicemen
  • low point for Hoover politically
56
Q

About 20,000 jobless WWI vets and families protest in Washington DC wanting an immediate pension payment - bonus promised to them in 1945

A

Bonus army

57
Q

I pledge myself a new deal for the American people

A

FDR said this

58
Q

FDR info

A
  • elected twice to NYC senate
  • served as assistant secretary of navy
  • from wealthy fam, passionate about helping average
  • suffered from polio
59
Q

Election results

A
  • FDR wins big -7 million of popular vote

- supported by working class and immigrants of catholic and Jewish descent

U.S History I (8 decks)

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