The Great Depression

Question 1

Causes of the Great Depression

Answer 1

Agriculture suffered: farmers went into debt when trying to fund their expansion.
- Massive unemployment and accompanying hardship
- Americas week banking system: 1930 bank failures-led to deflation
when prices drop, businesses cut costs by laying of workers. These workers cant buy anything so inventories continue to build up and prices drop furthur. Banks were not lending money so employers could not borrow it to make payroll to their workers and more and more buinesness went bankrupt leaving workers unable to purhcase goods to keep buisnesses open.

Question 2

Consequences

Answer 2

1. High unemployment rates
2. Deflation
3. Businesses failed due to decreased demand
4. Banks failed

Question 3

How the US responded to the Great Depression

Answer 3

Herbert Hoover responded by raising tariffs to their highest levels with the Hawley-Smoot tariff. This resulted in few buyers from American goods.
Hoover also persuaded industrialists to agree to maintain wage rates and got the federal farm board to support agricultural production.
- relied on private businesses and state and local government to stimulate the economy
FDR: implemented ‘the new deal’ which was a series of programs, work projects, financial reforms and regulations aimed to promote economic recovery by stimulating consumer demand.

Question 4

How Canada responded to the Great Depression

Answer 4

Mackenzie King:
- spend millions of dollars on relief programs
- public work projects to generate employment opportunities
- devalued canadian currency inorder to boost exports and stimulate economy

Bennet:
- kept a laissez-faire ideology: the policy of leaving things to take their own course
- Signed the 1939 National Housing Act which allows people to to receive credit to buy houses

Question 5

Other causes

Answer 5

1. Stockmarket Crash 1929: Overconsumption was a huge problem, people were buying things with money they did not have. (installment buying)
2. Bank Failures
3. Gap between rich and poor
4. Reduction in purchasing
5. Hawley Smoot Tariff
6. Dustbowl Drought
7. Buying on credit in 20’s