consumer economy quiz

Question 1

increased spending + larger profits for businesses = ?

Answer 1

bigger wages

Question 2

what are the factors that fuel the consumer economy

Answer 2

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

Question 3

in 1920 - 1929 americans owned..

Answer 3

40% of world’s wealth

Question 4

the average annual income rose

Answer 4

35%

Question 5

example of the new products

Answer 5

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

Question 6

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

Answer 6

assembly line

Question 7

the more products made, the…

Answer 7

less each one costs

Question 8

clever advertising…

Answer 8

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

Question 9

buying on credit

Answer 9

• most americans paid cash for everything

- expensive things were paid for with installment plans

Question 10

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

Answer 10

installment plan

Question 11

what did the installment plans do

Answer 11

fueled the growth of consumer spending

Question 12

clever advertising did what

Answer 12

made installment plan acceptable to public

Question 13

economic danger signs

Answer 13

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

Question 14

uneven prosperity?

Answer 14

mainly the rich that got richer

-government tax policy contributed to imbalance

Question 15

personal debt?

Answer 15

• installment plans and buying on credit became customary

- spending beyond means

Question 16

playing the stock market?

Answer 16

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

Question 17

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

Answer 17

buying on margin

Question 18

too many goods, too little demand

Answer 18

country’s warehouses were overstocked

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

Question 19

an average of stock prices of major industries

Answer 19

Dow Jones Industrial Average

Question 20

what is a stock?

Answer 20

• 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

Question 21

Stock Markets peak?

Answer 21

sept 3

Question 22

company’s earning and assets

Answer 22

real value - prices rose above their real value

Question 23

black Thursday date?

Answer 23

Oct 23

Question 24

Black Thursday

Answer 24

• dow jones average dropped 21 points in a hour

- investors began to sell shares, prices fell

Question 25

black Tuesday date?

Answer 25

october 29

Question 26

Black Tuesday

Answer 26

a record 16.4 million shares were sold - collapse of stock market - Great Crash - November 13 - overall losses totaled $130 Billion

Question 27

a span in which the economy grows then contracts

Answer 27

the business cycle

Question 28

effects of the crash

Answer 28

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

Question 29

how did the risky loans hurt the banks

Answer 29

businesses were unable to repay loans after crash

Question 30

what was consumer borrowing

Answer 30

the installment plans back fired | - customers did not have cash to pay banks

Question 31

bank runs?

Answer 31

people rushed to make withdrawals | - banks could not get money fast enough to keep up

Question 32

bank failures?

Answer 32

bank runs + unpaid loans = bank failures

Question 33

savings wiped out?

Answer 33

banks wiped out any savings people had

Question 34

cuts in production

Answer 34

businesses could not borrow money to produce goods | -no incentive to make things since people had no money

Question 35

underlying causes of the depression

Answer 35

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

Question 36

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

Answer 36

collateral

Question 37

social effects of the depression

Answer 37

- poverty - Hoovervilles - shelters, mocked president hoover who was blamed - dust bowl - destroyed farms

Question 38

a consumer economy depends on what

Answer 38

a large amount of spending by consumers

Question 39

Americans pull together while surviving the depression

Answer 39

- the American spirit of perseverance comes together | - many saw others worse off then themselves, even if they were in a difficult circumstance

Question 40

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

Answer 40

Penny auctions

Question 41

Farmers sticking together?

Answer 41

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

Question 42

Many states passed laws to stop the..

Answer 42

Foreclosure of farms

Question 43

Riding the rails

Answer 43

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

Question 44

How many hobos lived on the road

Answer 44

250,000

Question 45

Depression humor

Answer 45

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

Question 46

Prohibition is....

Answer 46

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

Question 47

End of a era

Answer 47

- Al Capone was arrested and convicted of tax evasion - former president Coolidge dies - babe Ruth retires

Question 48

The election of 1932

Answer 48

Republican-Hoover | Democratic - Roosevelt (FDR)

Question 49

Hoovers ideas

Answer 49

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

Question 50

Roosevelt's ideas

Answer 50

Federal government should step in to help Americans

Question 51

Hoover fails

Answer 51

Public begins blaming him and republicans

Question 52

Agricultural marketing act 1929

Answer 52

Passed before depression - relief for farmers - tried to help stabilize prices of farm crops - failed - sent farm prices down

Question 53

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

Answer 53

Hawley-smoot tariff

Question 54

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

Answer 54

Reconstruction finance corporation - this backfired - Americans felt money was only going to business people and ordinary people were left struggling

Question 55

Veterans march on Washington

Answer 55

- 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

Question 56

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

Answer 56

Bonus army

Question 57

I pledge myself a new deal for the American people

Answer 57

FDR said this

Question 58

FDR info

Answer 58

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

Question 59

Election results

Answer 59

- FDR wins big -7 million of popular vote | - supported by working class and immigrants of catholic and Jewish descent