S7 Great Depression Retake

How did the superficial prosperity of the Roaring Twenties hurt the American economy?

• It masked weaknesses in the economy such as the struggling of several key industries.

• It forced the United States to loan and borrow money from unpredictable foreign investors.

Why did the automobile and construction industry begin to economically suffer by 1930?

• overproduction

• high tariffs

What happened to the agricultural industry following WWI?

• Prices plummeted and many farmers unable to pay back loans went into foreclosure

• Production fell due to unpredictable weather patterns caused by global warming

How did many Americans respond to a steady increase in the Dow Jones Industrial Average during the 1920s?

• They began engaging speculation and buying on the margin.

• They increased savings to pay off their installment loans and mortgages.

What happened on October 29, 1929?

• The stock market crashed.

• World War II started.

How did Black Tuesday affect investors?

• People who bought on credit had huge debts and others lost their entire savings

• Investors who sold stock via "buying on the margin" were arrested

How did Black Tuesday affect the national economy?

• The economy plummeted and unemployment skyrocketed.

• The governemnt increased the price of commodities to offset costs.

Why was the Federal Reserve unable to supply money to help banks?

• The government based money circulation on the Gold Standard.

• The Federal Reserve required Presidential approval to print money.

How did the stock market crash affect employment?

• In four years, the unemployment rate went from 3% to 25%

• In four years, nearly half the population was on welfare.

What does the graph suggest about the correlation between banks, businesses, and unemployment?

• The failure of banks has a direct correlation with business failures and unemployment

• The recovery of banks has no clear correlation with unemployment.