The Great Depression

Question 0

What was the income disparity

Answer 0

One percent of the population controlled 1/3 of the assets

*** had an upper class which controlled a large portion

*** many poor

Question 1

What was there a record of in the 1920s?

Answer 1

Record profits

Question 2

The Great Depression led to far reaching ramifications where?

Answer 2

Around the world and the US

Question 3

The causes of the Great Depression were similar to the causes we see where?

Answer 3

In other

depressions
Recessions
Economic crashes

Question 4

Because of the record profits in the 1920s, people were very inclined to do what?

Answer 4

Invest in companies that were doing well

• not interested in helping to regulate the companies

Question 5

What were some characteristics of the Great Depression?

Answer 5

1. A lot of poor people
2. People didnt have money to spend

** in turn, ppl could not help the economy grow by purchasing products

Question 6

What did Bubble growth entail?

Answer 6

1. Diminishing returns

2. Decrease in wages

Question 7

Fast production caused?

Answer 7

A decrease in demand and lack of profitability for the producers

** things were made so quickly, there was much less of a demand for products

Question 8

What was the lack of profitability for the producers?

Answer 8

Less demand for continued products

Question 9

Explain the Large Debt increases of the Great Depression

Answer 9

1. Based on profits and growth
2. Individuals and companies were over-leveraging the companies

** trying to borrow too much money

Question 10

Explain the decline of agriculture in the Great Depression

Answer 10

• Dry conditions in a lot of the states that were big agricultural producers

“Dust Bowl”

• were unable to grow crops b/c of the lack of water

Question 11

What states were effected by the dry conditions during the Great Depression?

Answer 11

Kansas
Oklahoma
Arkansas

Places that had a lot of farming

Question 12

What was the stock market worth in 1925?

Answer 12

27 billion

Question 13

What was the stock market worth in 1929?

Answer 13

87 billion

• more than tripled since 1925

Question 14

What were the reasons for the large increase in worth of the stock market from 1925 (27 billion) to 1929 (87 billion) ?

Answer 14

• investment craze

- margin purchased (borrowing against stock to purchase more stocks)

Question 15

Explain the investment craze during 1925 - 1929

Answer 15

1. Because the market was growing so quickly
2. Ppl saw the stock market as a way to get rich quickly
3. Pouring a lot of money into a lot of stocks that did not have the value that they were being sold at

*** ppl were buying off of perceived value, not true value of the company, thus paying more than they should

Question 16

Explain the margin purchases of the Great Depression

Answer 16

Ppl were buying stocks with money that they really did not have

** stocks that they were using to buy other stocks could lose value

Question 17

When was the stock market crash during the Great Depression?

Answer 17

October 24th, 1929

“Black Thursday”

Question 18

People realized what during the stock market crash?

Answer 18

That the market had become over-inflated

In turn

Panic-selling: everybody was selling their stocks b.c. They thought the market was gonna lose it value

** their stocks didnt have much value

Question 19

What happened to the value of the stocks during the Great Depression?

Answer 19

The value of the stocks went way down

Question 20

What did JP Morgan (and others) do in order to try to stop the stock market crash?

Answer 20

Buy stocks - artificially bolster the value of the stocks

** didnt prevent the stock market crash

Question 21

With the value of currency going down, what happened to the banks?

Answer 21

The banks started to fail

• they were based on assets which had lost huge amount of value

** unable to lend

Question 22

With the banks failing, what happened to credit?

Answer 22

It crashed as well

• unable to lend money to businesses and individuals

Question 23

With credit failing how did this hurt the economy?

Answer 23

People and businesses were unable to borrow and therefore could not purchase things to grow, expand, and boost the economy

Question 24

What happened to the value of the dollar and spending?

Answer 24

Less value for the dollar and the investments in companies

Less spending hurt the economy

Question 25

As companies suffered, lost value, and ability to create more products what happened to the employment rate?

Answer 25

Lots of layoffs occurred

** didnt need a big staff

Question 26

In 1929 how many people were unemployed compared to 1932?

Answer 26

1929: 1.5 million
1932: 12 million

**As a result of the stock market crash, during the Great Depression, we saw widespread unemployment

Question 27

What was Herbert Hoover’s plan during the Great Depression?

Answer 27

Limit government spending

Question 28

What was FDR’s approach to tackling the Great Depression?

Answer 28

Increase government spending

“The New Deal”
* example of gov’t trying to improve conditions for all

Question 29

What was “The New Deal”?

Answer 29

A series of economic programs to counteract the Great Depression

Implemented during 1933-1936 [first term of Franklin Roosevelt

Question 30

Explain the public works projects in The New Deal

Answer 30

Spending government money on building

Roads
Parks

Putting ppl to work! With jobs funded by gov’t

Question 31

Once more jobs were created, what was Franklin Roosevelt’s plan to boost the economy in The New Deal?

Answer 31

As more ppl were getting paid, they could put more money into the economy

** further bolster growth and recovery

Question 32

What did the programs of The New Deal focus on?

Answer 32

Relief

• • jobs for poor
• • social services

Recovery

• • recovery for economy as a whole
• • jumpstart thru public work
• • build more spending in the economy

Reform

• • reforming wall street and the stock market
• • try to prevent a crash again (not completely effective)

Question 33

Many farmworkers suffered and lost their?

Answer 33

Jobs and crops / was hard to farm without water

Question 34

Many farmworkers tried to move where?

Answer 34

California

Other places where agriculture was still thriving

Question 35

What was a famous novel about ppl moving to find better agriculture?

Answer 35

The Grapes of Wrath

Question 36

What were the difficult conditions about families moving to other states to find more work in agriculture?

Answer 36

• competition for work
• workers exploited / taken advantage of

*** difficult time for those living in poverty