The Great Depression Flashcards
What are the several factors in a consumer economy?
higher wages new products clever advertising lower costs widespread availability of credit
1920-1929–
What prospered for the United States?
higher wages
Americans owned ______% of the world’s wealth.
40
The average annual income rose how much?
35%
What was a new product that changed the landscape of the country?
automobile
Automobiles built us cities like ___________, ____________, ___________, _____________.
Detroit, Akron, Dearborn, Flint
T or F
Automobiles further isolated the rural family.
F, liberated**
What was the only automobile made during this time called?
Model-T
Who developed the first automobile to be purchased by consumers?
Henry Ford
manufacturing process in which each worker does one specialized task in the construction of the final product
Assembly line
Because of the mass production of automobiles, what happened to the value of each one?
they cost less
________________ making became nation’s biggest single manufacturing industry of 1920s.
Automobile
What helped inform the public of new products?
clever advertising
Ad agencies hired psychologists to study how to appeal to people’s desire for ____________, ____________, ____________ and ______________.
youthfulness, beauty, health and wealth
Before the 1920s, most Americans paid ________ for everything.
cash
Because the new products were presented as very expensive to people, and no one had the money to pay for them, they used what?
loans
customers make partial payments over a period of time until debt is paid
installment plans
What fueled the growth of consumer spending?
buying on credit
what made buying on credit acceptable to public?
clever advertising
T of F
Buying on credit encouraged to buy all kinds of products.
T
depends on increased spending, causing larger profits for businesses, and creating bigger wages
Consumer Economy
The uneven prosperity only made the _______ that got richer.
rich
How did the government tax policy contribute to the imbalance?
taxes were cut for the wealthy
What two things became customary?
installment plans && buying on credit
the practice of making high-risk investments in hopes of getting a huge return
speculation
What kinds of people were playing the stock market && spending their life savings?
commonly just the wealthy, but ordinary citizens were getting involved too
allowed investors to purchase a stock for only a fraction of its prices and borrow the rest
buying on margin
Country’s warehouses were ___________________.
overstocked
too many goods= too little ___________
demand
Although wages rose, consumers were still unable to what?
afford to buy goods as fast as the assembly turned them out
an average of stock prices of major industries
Dow Jones Industrial Average
T or F
Stock deals with putting your money directly into a company.
T
a “stake” that you own from a company is called what?
a “share”
What changes as the stock market also changes?
the value of your share
The stock market continues to go up and then peaks September 3, _____?
1929
Prices soared far above their _______ value.
real
company’s earnings and assets
real value
When was Black Thursday?
October 23
stock prices fell slowly….
some brokers called in their loans and others continued to what?
loan out more money
On October 23, the Dow Jones average dropped how many points in an hour?
21
worried investors did what after the Dow dropped?
sold their shares
How did bankers stop the panic and help stabilize for a few days?
they pooled money to buy stocks
How many shares were sold on Black Tuesday?
16.4 million»_space; a new record
What was known as the Great Crash?
the collapse of the stock market
Did the Crash only last one day?
NO, continued for a while
By November 13 how many losses were made?
$30 billion
a span in which the economy grows then contracts
The Business Cycle
the lowest point of The Business Cycle is called what?
Depression
Throughout the 1920s banks loaned out huge sums of??
$$$$$$
After the Crash, businesses were unable to repay ________ after the Crash.
loans
The banks called in their loans, but customers did not have what?
the cash to pay
Why did so many people make bank runs after the Crash?
feared that the banks would run out of money– had to make withdraws
withdraws could only be made if what was paid?
loans
the bank could not get money fast enough to keep up with the demand of what?
withdraws
what two major things led to bank failures?
bank runs and unpaid loans
in just a few years, how many banks were shut down?
5,500
What wiped out any savings people had left?
bank failures
T or F
In 1933, money from 9 million savings accounts vanished.
T
After the Crash, production was cut down by a lot, why?
businesses could not borrow money to produce to goods
Most people were unable to buy ___________ after the Crash.
products
As unemployment rose what happened?
business cut production and laid off workers
T or F
consumers spent less and less $$$$.
T
An unstable economy was unevenly distributed– meaning??
rich got richer
industries produced more products than what they could _______.
sell
buying stocks with borrowed money
over-speculation
used the stocks as ____________ to buy more stocks
collateral
an item of value that a borrower agrees to give up to the lender if the borrower cannot repay the loan
collateral
Federal Reserve limited the money supply for what purpose?
to discourage lending in 1929
There was too little money in circulation to help the economy ___________.
recover
People of _________ levels of society were affected.
ALL
homeless people that built shelters out of scraps
“Hoovervilles”
Why were they named “Hoovervilles”?
they were named to mock President Hoover who many blamed for not resolving the crisis
What was the Dust Bowl?
located in the central and southern Great Plains region; so much soil and dirt blew around this area
farming practices stripped soil of protective layer- creating what?
erosion
most severe of the dry years
“Black Blizzards”
dirt was carried ________ to New York, D.C., and New England
east
What went on for seven years?
drought, winds, and devastated farms
___% families lost their farms.
60
many families migrated where to look for relief?
California
When did many recover from the Dust Bowl?
not until rains came in the 40s and WWII brought up farm prices
How did the Dust Bowl effect people’s health?
physical and pschological
What did the psychological effect lead to?
anxiety, depression, and suicides
Who suffered the most after the Dust Bowl?
children
thousands of children were in _________ _______.
bread lines
what disease was rising after the Dust Bowl?
tuberculosis
living conditions changed for many crowded what?
houses//apartments
What did many men do during this time?
they were embarrassed of lost jobs, not able to support family, and some abandoned family
What were women accused of?
taking jobs away from men
What were many women worried about?
feeding children and providing money if abandoned
general rise in _____________ against minorities.
hostility
