Unit 4 Final Exam Review

All of the following were causes of the Great Depression EXCEPT:

• The wealthiest 1% of Americans had 14.5% of the income which left farmers and workers without enough money to purchase goods.

• The payment of war debts from World War I and bonus' for army veterans.

• The Federal Reserve raised interest rates which contracted (reduced) the money supply in circulation.

• After World War I demand for agricultural products fell resulting in a steep (large) drop in the prices--farmers were unable to recover

How did bank failures contribute to the Great Depression?

• People lost their life savings because the govt. did not insure bank deposits

• Business could not be done when FDR declared a Banking Holiday

• THe interest rates on bank loans were too high

• Foreign investors did not invest enough in US banks

What did this cartoonist believe was one major cause of the Great Depression?

• Men who used to be rich

• Poor people

• Speculation (high risk investments) in the stock market

• Central Railway Company

How did 1920s US economic policies contribute to the Great Depression in the 1930s?

• High tariffs increased international trade and improved trade around the world.

• The tariff policies of the US led to the Dust Bowl migration as farmland dried up and people lost their homes.

• Republican presidents during the 1920s supported economic policies that expected each American to buy more foreign goods to improve the global economy.

• High tariffs in the US caused international trade to decline which let to factory closures, unemployment and peoples failure to repay loans

How did 1930s monetary policies lead America into depression as supported by the reference?

• Due to new monetary policies, banks closed and interest rates rose; however, factories still expanded and people went back to work.

• As banks closed, people lost money; and the Federal Reserve raised interest rates, which caused the money supply to decrease.

• The Federal Reserve regulated the money supply by providing loans to keep employment high; at the same time, the state governments increased regulations on state banks.

• Unemployment led to a reduced money supply and the Federal Reserve lowered interest rates as a response in monetary policy to the crisis; as a result, farmers and merchants increased business.

Which person's achievements are described in this list

• Herbert Hoover

• Franklin Roosevelt

• Glen Curtis

• Henry Ford