The Nation's Sick Economy-Great Depression

What effect did the Great Depression have on the American Economy?

• It led to high unemployment and underproduction

• It brought about large business investments and low taxes

• It created too much money in circulation and high stock prices

• It increased employment and real estate values

What conditions are most characteristic of an economic depression?

• Large number of business failures and falling prices

• Large business investments and low taxes

• Too much money in circulation and high stock prices

• High rates of employment and rising real estate investments

Why was much of the prosperity of the 1920s more superficial than real?

• Many people were living beyond their means.

• Many people were relocating from farms to the cities

• Many people were becoming wealthier in the stock market.

• Many people were benefiting from increased jobs after the war.

What was one problem with speculation?

• The rising stock prices did not reflect the actual worth of companies.

• The government was prohibited from regulating the prices on stocks

• The rich kept getting richer since they were the only ones who could buy

  Stocks

• The stock traders were unable to get the best deals for their clients because too

  many stocks were available

Why was Black Tuesday such a significant day in American history?

• It was the day when the stock market crashed.

• It was the day when the Fed set the first monetary policies.

• It was the day when the idea of speculation was first introduced.

• It was the day when stock prices reached their highest rate of exchange

Why did the Great Depression in America compound the problems that were already going on in Europe?

• Americans were unable to buy European goods during this time

• Americans were unable to travel to Europe on vacation during this time.

• American politicians were unable to offer political asylum during this time.

• American banks were unable to provide European banks with loans during this

  time

Deflation

• When the government buys surplus crops at guaranteed prices and sells them on the world market

• Decrease in the general price level of goods and services

• The Republican candidate who ran against Herbert Hoover in the 1928 election

• The most widely used barometer of the stock market’s health

Hawley-Smoot Tariff Act

• The practice of buying stocks and bonds on the chance of a quick profit, while ignoring the risks

• The stock market crash signaled the beginning of this period of time that lasted from 1929 through the 1930’s

• Established the highest protective tariff in U.S. history. It was designed to protect American farmers and manufacturers from foreign competition

• October 29th, 1929, the bottom fell out of the stock market and the nation lost confidence in the economy

Great Depression

• The stock market crash signaled the beginning of this period of time that lasted from 1929 through the 1930’s

• Paying a small percentage of a stock’s price as a down payment and borrowing the rest

• The practice of buying stocks and bonds on the chance of a quick profit, while ignoring the risks

• The most widely used barometer of the stock market’s health

Which of the following was NOT a cause of the Great Depression?

• Overproduction

• Not enough credit availability

• Unequal distribution of wealth

• Stock Market Crash of 1929