Unit 5 Practice Test

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

• The Stock Market Crash

• Decline in Farm Incomes

• The Harlem Renaissance

• Overproduction of Goods

True or False? Lack of financial regulation was a cause of the stock market crash?

• True

• False

How does the stock market work?

• The public invests in companies hoping to make a financial gain.

• People give free money to the government to repay them for programs that support them.

• People buy into a company and are able to make decisions about that company's future.

Which of the following is NOT a reason that farm incomes declined in the 1930s.

• Farmers borrowed too much money from banks to buy new farming equipment.

• Crop prices fell because there was a surplus of product.

• The dust bowl

• Farmers were not educated on the best way to grow food.

True or False? In the 1930s's 1% of the population held over 59% of the nations total wealth?

• True

• False

Why were businesses overproducing, or producing more goods than people could buy?

• Credit ran out and people could no longer buy goods that they could not afford.

• They were expecting the birth rate to go up, therefore providing more people to buy the goods.

• They were expecting the military to pay veterans more, providing them with income to purchase more goods.

What is credit?

• Credit allows people to buy a high-priced good and pay for it over time.

• Credit is when you can pay for the item whenever you can make the money for it.

• Credit allows a buyer to pay the item back in only two payments.

Why was the stock market crash such a big problem?

• People needed to invest more money in big businesses .

• Many people lost almost all of their wealth.

• People had to wait to access their funds.

What percent of people were unemployed in the 1930s?

• 3%

• 10%

• 25%

• 50%

True or False? The unemployment rate in the 1930s was the highest it has ever been in US history.

• True

• False