CH 18 Causes of Economic Decline Assessment

1. Most banks refused to give out credit loans to high risk individuals throughout the 1920's

• True
• False

2. Most inexperienced investors invested in high risk investments. This is known as __________________ investing

• Speculation
• Flagellation
• Socialism

3. As a sign of the unhealthy economy a massive imbalance of wealth was apparent. The top .01% percent of the population controlled _______% of all the nation's wealth and investments. This allowed for too much influence and manipulation in the economy by such a small group of people.

• 10%
• 33%
• 50%

4. As the economic system worsened consumerism dropped and business profits began to fall. Business started to cut back on production. This in turn caused more workers to now have hours reduced, wages reduced or to be fired. Due to this further consumerism would reduce as a result. The above explanation is an example of....

• Supply and Demand
• Communism
• Oligarchism

5. Farmers took out huge loans as demand for their products rose rapidly as a result of __________________. As a result many farmers took out huge loans to meet the large production needs. Unfortunately, as demand for their products started to level off many farmers fell into debt trying to pay off these huge loans. As a result many farms foreclosed.

• Recession of 1919
• World War 1
• Industrial Revolution