Chapter 30 - Causes of the Great Depression

Which of the following statements BEST describes what happened on Black Tuesday?

• Stock prices fell and the stock market crashed.

• Federal troops attacked the Bonus Army marchers.

• Bank runs forced many banks to close their doors.

• The Supreme Court ruled that the NRA was unconstitutional.

Why was there not a demand for all the goods being produced in the late 1920s?

• Monopolies dominated the market and set extremely high prices.

• Companies outside of the United States offered lower priced goods.

• People could not afford to buy all the goods that were being produced.

• Banks began refusing credit to people who did not have steady jobs.

Which of the following is NOT considered a cause of the Great Depression?

• overproduction

• stock speculation

• under consumption

• foreign competition

How did investors respond to the bear market in 1929, and what was the effect of this response?

• Investors began buying stocks overseas, which led to a bull market.

• Investors bought as many stocks as possible, which raised stock prices.

• Investors put all of their money into stocks, which caused banks to fail.

• Investors quickly sold their stocks, which caused stock prices to lower.

How did Congress contribute to the cause of the Great Depression?

• They kept interest rates low to make borrowing money easier.

• They passed a law that raised the taxes of imported goods.

• They made policies that favored global trade over local trade.

• They implemented an extremely high discount rate.

What was the main contributor to many banks failing between 1930 and 1933?

• People often did not take out loans because of the high interest rates.

• People lost trust in the banks and many tried to withdraw their money

• People were no longer interested in using credit to purchase goods.

• People usually purchased goods instead of saving money in a bank.

Which of these did the MOST to trigger a worldwide collapse in trade during the 1930s?

• Dawes Plan

• Hawley-Smoot Tariff Act

• Dust Bowl

• Black Tuesday

A bull market is a period in which stock prices are ______.

• rising

• falling

• constant

• all of the above

What key factor made borrowing money very easy in the 1920s?

• high interest rates

• low consumption

• low interest rates

• high consumption

Why did American farmers experience the pain of underconsumption a full decade before industry began to suffer?

• all of the options

• Many American families began buying food from Europe.

• Higher prices for new agricultural technology led to many farms foreclosing.

• When World War I ended, large food markets in Europe disappeared.