Understanding the Great Depression

What is a common misconception about the start of the Great Depression?

• It was solely caused by the stock market crash in October 1929.

• It began with the agricultural downturn of the early 1920s.

• It started due to a massive earthquake that disrupted the economy.

• It was triggered by the onset of World War II.

What role did credit play in the economic conditions before the Great Depression?

• Credit was largely unavailable, leading to decreased consumer spending.

• Credit use was sustainable and did not contribute to the Depression.

• Excessive use of credit for consumer products was unsustainable.

• Credit was only used for agricultural purposes.

How did the agricultural sector contribute to the economic conditions leading to the Great Depression?

• By producing too little to meet domestic needs.

• Through the mechanization and expansion of farms, leading to debt and overproduction.

• By exporting too much produce overseas.

• By failing to modernize, leading to inefficiency.

What was a significant factor in the banking system that contributed to the Great Depression?

• The over-reliance on gold reserves.

• The Federal Reserve's excessive printing of money.

• Weaknesses in the banking system, including reliance on individual bank reserves.

• The strength and resilience of small banks.

What was the primary cause of bank failures during the Great Depression?

• Government intervention in banking operations.

• Depositors rushing to withdraw their money, leading to a lack of reserves.

• A sudden increase in gold reserves.

• Banks investing too heavily in the stock market.

What was a major consequence of the deflationary spiral during the Great Depression?

• Increased investment in the stock market.

• A rapid increase in consumer spending.

• Businesses cutting costs by laying off workers, leading to further economic decline.

• Banks lending more money to stimulate the economy.

Why was Herbert Hoover's response to the Great Depression considered insufficient?

• His measures were limited and did not fully address the economic crisis.

• He focused solely on foreign policies.

• He provided too much federal assistance to the unemployed.

• He implemented too many regulations on banks.

What global event did Herbert Hoover blame for the Great Depression in his memoirs?

• World War I.

• The signing of the Treaty of Versailles.

• The fall of the Ottoman Empire.

• The Russian Revolution.

What was the effect of the Hawley-Smoot Tariff during the Great Depression?

• It improved global trade relations.

• It had no significant impact on the American economy.

• It led to a decrease in unemployment in the U.S.

• It resulted in retaliatory tariffs and reduced international trade.

How did the public and private sectors respond to the need for relief during the Great Depression?

• By increasing charitable giving and government relief programs, though still insufficient.

• Through large-scale federal employment programs.

• By significantly reducing taxes to increase disposable income.

• By relying solely on international aid.