Understanding the Great Depression

What was a major factor that led to the Great Depression?

• The invention of new consumer products

• Widespread use of credit for purchases

• Increase in agricultural production

• Reduction in global trade tariffs

Which sector suffered throughout the 1920s leading to economic instability?

• Automotive

• Agriculture

• Technology

• Banking

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What event is often mistakenly believed to have caused the Great Depression?

• A massive earthquake

• The introduction of the Federal Reserve

• The stock market crash of 1929

• World War I

What critical mistake did banks make during the 1920s?

• Stopped giving out loans

• Invested heavily in the stock market

• Reduced interest rates drastically

• Only supported agricultural loans

What was NOT a result of the banking failures during the Great Depression?

• Credit freeze

• Deflation

• Increase in consumer spending

• Bankruptcies of businesses

What was a major consequence of the deflationary spiral?

• Businesses cutting costs by laying off workers

• Expansion of international trade

• Higher employment rates

• Increased wages

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What did Herbert Hoover believe was the primary cause of the Great Depression?

• World War I

• The gold standard

• Overproduction in agriculture

• Poor banking practices

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Why did Hoover's measures fail to stop the Great Depression?

• He increased taxes

• He reduced government spending

• He abolished the gold standard

• He implemented widespread social programs

What was the purpose of the Hawley-Smoot Tariff?

• To increase global trade

• To decrease consumer prices

• To promote agricultural exports

• To protect American industries

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What was a societal impact of the Great Depression?

• Increased investment in stocks

• Expansion of international businesses

• Growth in luxury goods consumption

• Many Americans searching for work and food

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