Causes and Effects of the Great Depression

Leading up to the Great Depression, American Farmers were overproducing causing a surplus in crops. How did this affect them?

• this decreased profits enabling many farmers to purchase more lands

• the Farmer's Alliance was able to use this surplus to negotiate better terms with the owners

• this decreased profits causing many farmers to lose their farms

• this increased profits and enabled them to purchase new equipment

How did American banks help cause the Great Depression?

• banks refused to lend money to people in the early 1920s causing many people to lose their homes

• excessive bank lending put many people into large debt that they could not pay back

• banks refused to use people's money to play the stock market for them

• the banks did not print enough money for all its customers

Why is "Buying Stocks On Margin" such a risky venture?

• because On Margin stocks always devalue

• many markets will not accept stocks that are purchased On Margin

• because they give the owner limited liability

• because if the stock devalues, or goes bankrupt, the owner then loses their investment, and still has to repay the loan on the stock

Approximately 9000 banks failed during the Great Depression. How did the bank closings affect the American population?

• nine million savings accounts were wiped out

• people lost their retirement accounts

• people could not pay their home mortgages

• all of the above

During the 1920s many Americans were using credit and installment buying to purchase the new products. How did this trend of "consumerism" help lead to the Great Depression?

• factories ran out of products to sell and had to lay workers off

• people were spending more money than they could afford, and going into such debt that they could not pay back

• credit card companies went out of business

• none of the above

What was the Great Depression?

• how Mr. Ranallo feels on the last day of school when he knows he won't see his students again for 10 weeks

• an economic period consisting of a financial boom

• a time of high inflationary prices

• the worst economic times in American History

In the 1920s American banks were lending money to almost anyone that applied. Eventually, the Federal Reserve increased the Reserve Requirement for banks. What does this mean?

• banks had to increase the amount of money they were lending out

• the Federal Reserve required banks to pay it a certain amount of money each month

• banks had to increase the amount of money they had "in bank" at all times to cover withdrawals

• banks were required to close for a certain amount of time to revamp the system

At the onset of the Great Depression where did the "relief" come from?

• Government Welfare

• private charities, extended families, soup kitchens, and bread lines

• President Herbert Hoover

• Social Security

What was the name given to the massive dust storms that devastated American farms in the middle of the country?

• "Dust Bowl"

• "Sand Storm"

• "The Mummy"

• "Dusty Region"

Why were the homeless camps, or shanty-towns, across the major cities of the U.S. nicknamed "Hoovervilles"?

• because President Hoover visited them often

• because many people blamed President Herbert Hoover for the depression because of his reluctance to use the government to fix it

• because President Hoover had been homeless at one time

• none of the above