The Crash & the Great Depression Pt. 1

Multiple Choice

Which trend best explains why many Americans felt confident investing during the late 1920s?

• Government guarantees protected personal investments

• Stock prices continued to rise and prosperity felt permanent

• Interest rates were extremely high for savings accounts

• Federal regulations limited risky investment behavior

Multiple Choice

Why was buying stocks on the margin especially dangerous when prices began to fall?

• Investors were forced to sell government bonds

• Banks immediately seized personal property

• Stock ownership was temporarily suspended

• Borrowed money still had to be repaid despite losses

Open Ended

CER #1: In your opinion, was the U.S. economy in the late 1920s strong or unstable? Provide ONE piece of evidence, as apart of your response.

Multiple Choice

What event marked the most dramatic single-day loss during the stock market crash of 1929?

• Black Tuesday’s massive drop in stock values

• The introduction of new federal banking laws

• The collapse of international trade

• The closure of the Federal Reserve System

Multiple Choice

Why did many banks fail following the stock market crash?

• They refused to issue loans to farmers

• They invested depositors’ money in the stock market

• They were shut down by the federal government

• They lost money due to rising interest rates

Multiple Choice

Which factor most directly caused bank runs during the early years of the Great Depression?

• High interest rates on personal loans

• Increased government regulation of banks

• Fear that banks would collapse and lose savings

• Competition from international financial institutions