The Great Depression - Causes and Problems

What were the main causes of the Great Depression according to the worksheet?

• Economic growth and political conservatism in the 1920s, speculation, margin buying, expansion of credit, Federal Reserve Bank policies, and farm issues.

• Rapid industrialization and technological innovation in the 1930s, increased government spending, and global peace.

• The discovery of new gold reserves, a sudden population boom, and the rise of small businesses.

• Widespread labor strikes, the end of World War I, and the collapse of the automobile industry.

Who was the U.S. President from 1921-1929 mentioned in the background of the Great Depression?

• Coolidge

• Hoover

• Wilson

• Roosevelt

Which of the following best describes 'speculation' as a cause of the Great Depression?

• Borrowing money to buy stocks

• Conducting a financial transaction with substantial risk of loss but expectation of significant gain

• Consumer loans for new appliances

• Regulation of banks

Fill in the blank: In margin buying, investors could take a loan for ___% of a stock's value, believing the share price would increase.

• 90

• 50

• 70

• 30

Which of the following was NOT a problem associated with margin buying?

• A) Investors had to repay the bank if share prices fell

• B) It was unprecedented and stimulated the market

• C) It reduced the price for regular people

• D) It eliminated all risk for investors

What was one reason for the expansion of credit during the 1920s?

• Decreased personal debt

• Consumer loans for new appliances

• Strict bank regulations

• Decrease in stock prices

True or False: The Federal Reserve Bank actively worked to prevent economic problems during the Great Depression.

• True

• False

What economic policy did the Federal Reserve Bank follow during the Great Depression?

• Strict regulation

• Laissez-faire

• Increased government spending

• Price controls

The boom experienced by farmers during the First World War ended by which year?

• 1920

• 1918

• 1925

• 1930

Which countries increased competition in world markets for US farmers in the 1920s?

• Argentina and Canada

• France and Italy

• China and Japan

• Australia and New Zealand