The Great Depression Flashcards
1
Q
Capitalism
A
- Industrial Capitalism allows for industrial growth and prosperity
- creates vast social inequalities
- capitalism can be unstable (economic cycles)
- benefits: created the most substantial economic growth in the 19th century
- provided opportunities for wealth and social advancement
- problems: promoted individualistic materialism
- created vast social inequalities
- unstable system, cycles of boom and bust, expansion and recession
2
Q
Stock Market Crash, 1929
A
- throughout the 1920s people were confident that business would bring continued prosperity
- by the end of the decade the danger signs were there
- uneven distribution of wealth
- overproduction of goods
- too much supply & too little demand
- personal debt/buying on the installment plan
- playing the stock market
- buying on margin/over-speculation
- hardship for farmers and workers
- market was overbought, overvalued
- people bought stock on margin (RISKY)
3
Q
Black Tuesday, October 29, 1929
A
- stock market peaked Sept. 3, 1929, then stocks started falling — it had been a “bull” market (stock prices staying up)
- by Tuesday, October 29, 16.4 million shares were sold as investors raced to sell their stock shares (a “bear” market when stock prices are low)
- the reaction was many investors raced to sell their stocks
- it let for many to become unemployed afterwards
- overall losses $30 billion
4
Q
Poverty Abounds
A
- after the stock market crash. poverty did not discriminate as all levels of society were hit
- unemployment went form under 2% in 1929 to 13% by 1933 leaving roughly 12 million people unemployed
- more than 5,500 banks closed their doors
- 85,000 businesses closed
- 400,000 farms lost in bankruptcy or foreclosure
- $9,000,000 in savings wiped out
- hunger and suffering-no relief system or welfare programs
- women fared better at first; worked for less pay
- lost those jobs to men who were supposed to be working, supporting family
- 2.600 schools closed-lack of funds; children forced to work in sweatshops
- farmers destroyed crops and livestock because it was cheaper than raising them
5
Q
the New Deal (1932) with the election of Franklin D. Roosevelt
A
- goal was to restore confidence in the economy
- three areas of focus: relief, recovery, and reform
- relief programs were needed to help immediately
- recovery programs were needed to help rebuild
- reform programs were needed to help the disaster from happening again
6
Q
note
A
- many European countries could to afford to buy goods
- Germany and Austria - had to make reparations payments and needed U.S. loans to make them
- Britain and France - in debt to the U.S. from money they borrowed during WWI
- Europeans began producing their own products again as their economies recovered
- reduced demand for American products
- some countries became interested in communism and looked at the Soviet Union
- many western European countries adopted “democratic socialism” - greater government regulation of the economy and a more equal distribution of wealth through peaceful means and electoral politics
7
Q
over-purchasing in the stock market in the late 1920s caused stocks to become _________
A
- overvalued
8
Q
in 1929, the United States stock market crashed because _______
A
- there was rampant speculation in the system
- too many people were buying stocks on margin
- there was little regulation in the market
9
Q
buying stocks on margin was a good option as long as _________
A
- the price of the stock increased
10
Q
which is the most accurate analysis of industrial capitalism?
A
- it drive innovation, but it also fuels greed and income inequality
11
Q
which of the following is NOT a benefit of industrial capitalism
A
- income inequality
12
Q
the expanded use of credit in the 1920s led to _______ in the U.S.
A
- overproduction of goods
13
Q
the stock market in 1929 just prior to the crash is often described as a “house of cards” because _______
A
- market values were based on the fragile perceptions of investors
