The Great Depression

The Great Depression

Read the following passage:

A fourth factor leading to the economic collapse was unequal distribution of income. Even though business profits increased during the 1920s, the wages earned by American workers failed to rise. This meant that many Americans could not afford to buy the finished goods that factories were producing, even using easy credit. The result of this was a falling demand for consumer goods. Once again, American businesses were left with huge surpluses of goods they could not sell because their workers did not make enough to buy them.

Multiple Choice

How did unequal distribution of wealth weaken the economy?

• there was not enough money to invest in stocks

• it lead to shortages of consumer goods

• demand for consumer goods began to fall

Multiple Choice

What cause of the Great Depression is being discussed in the video?

• over-investment in stocks

• crisis in farming

• high tariffs on imports

Multiple Choice

Why did the Stock Market crash lead to bank failures?

• people had borrowed from banks to invest in the stock market

• people stopped using banks after the stock market crash

• businesses began borrowing from banks to cover their losses

Multiple Choice

Hoover hoped that lowering taxes would

• encourage banks to loan more money

• make the federal government more efficient

• give people more money to invest or spend

Multiple Choice

What is the cartoonist suggesting?

• Hoover might not get re-elected to a second term

• Homeless people appreciated Hoover's help

• Hoover completely ignored the Great Depression