Great Depression Flashcards
What was the time period between 1929 and 1941 in America
The great depression
Identify the major causes of the great depression
Drop in farm prices Massively uneven distribution of income Buying on credit Overproduction of goods Stock market crash of 1929
What was the cause “drop in farm prices”
Lower prices mesnt lower income for farmers so the farmers had to borrow money from the bank to pay for land and equipment
what was the cause “massively uneven distribution of income”
The rich got richer and the poor got poorer and usually only business owners benefited from the growth and the business. over 70% of the US families had too low of an income for a good standard living
 what was the cause “buying on credit”
Allowed Americans to buy expensive goods, but when people reach their credit limit purchases slowed. W
arehouses became filled with goods no one could afford to buy anymore and people who bought stocks on credit couldn’t repay the debt to the bank
What was the cause “overproduction of goods”
farms and factories overproduced beyond the demand and had extras.
when businesses cut production jobs were also cut and workers suffered.
people had little to no money to spend
what was the cause “stock market crash of 1929”
Stock prices had plunged and people wanted to sell their stocks before the companies tanked.
People don’t want to buy stocks of a company that they think is crashing so people who bought stocks on margin couldn’t afford to repay those loans.
Explain with the stock market is and how it works
The stock market lets buyers and sellers negotiate prices and make trades
Companies list shares of their stocks and investors purchase those shares which allows the company to raise money to grow its business.
What are stocks
stocks are shares or parts of a company that you invest in
Who won the election of 1928 and why
Herbert Hoover won because when Coolidge didn’t run for reelection he automatically got votes from Republicans. Hoover‘s opponent Smith was the first Catholic to run for president and face prejudice because of his religion
How did the rising prices of products reflect the uneven distribution of wealth in the 1920s
For most Americans rising prices swallowed up an increase in salary and by 1929 over 70% of US families had too low of an income for good standard living
Why did purchase a slow down toward the end of the 1920s
A lot of Americans reach their credit limit
Explain the concept of buying on credit
When you buy of credit you’re taking a loan from the bank and your credit has limit and if you don’t pay that limit back on time your credit score will go down credit score basically means your reputation..
FAKE MONEY
How did credit impact the economy of America during the late 1920s
Everyone was buying off of credit and using fake money that they didn’t have so in banks asked for people to pay back their loans the bank couldn’t get their money back and a lot of Americans lost their savings that they had deposited to the bank
Farms in factory started producing more products and society demanded explain the impact it had on society
Since they overproduce beyond the command businesses cut production and jobs were cut
When jobs were cut workers suffered and had a little or no money to spend it when people have no money the demand for goods fell
What does it mean to buy on margin
Buying on margin meant that you bought stocks with loans from stockbrokers in what you’d pay brokers back when you sold the stock
Why was buying on margin a problem
Buying on margin was risky because fallen stocks left investors and debt with no
What was a margin call
A margin calls when stocks fell and broke her she could ask for their loans back
Why were margin calls a challenge for Americans
Margin calls cause lots of Americans to go in debt and some couldn’t even pay back their loans
What is the federal reserve
The nations central bank
what was black Tuesday
on October 29 it was the worst day of the stock market crash and affected the stocks of even solid companies
Why did Black Tuesday happen and what impact did it have
More than 16 million shares were traded in one day and was beginning of the great depression
Why did the stock market crash cars banks to fail
when the market crashed people with bank accounts rush to withdraw their money and which drain the bank of funds
Explain how the banking crisis impacted American society
When hundreds of banks failed including the enormous bank of the United States it wiped out billions of savings
What were bank runs
A string of nervous depositors withdrawing money
Why did bank runs happen and what impact did they have
People were scared they would lose their money from the bank failing and runs could quickly drain a bank of all its cash in which can cause the banks closure
Why and how we’re businesses impacted by the stock market crash
lots of Americans lost their money from the crash and this meant that they couldn’t afford to spend money on businesses
With no income from people spending money businesses were collapsing and caused a domino effect on other businesses
What did the unemployment rate raised to during the great depression and why
unemployment rate reach 25% and the neighborhoods like Harlem it richest staggering 50% in 1932
Unemployment rate skyrocketed because businesses were being shut down and banks were collapsing
