Causes of the Great Depression

How high was the unemployment rate during the height of the Great Depression?

• 25%

• 10%

• 5%

• 40%

Answer explanation

During the Great Depression, the unemployment rate peaked at around 25%, making it the correct answer. This was a time of severe economic downturn, leading to widespread job losses.

How many parts of the country felt the effects of the Great Depression?

• Every region felt the effects of the depression.

• Only the southern states felt the effects of the depression.

• Only the industrial cities were affected by the depression.

• Only rural areas experienced the depression.

Answer explanation

The Great Depression impacted every region of the United States, affecting urban and rural areas alike, not just specific states or cities. Therefore, the correct answer is that every region felt the effects of the depression.

How did the Great Depression change the role of the Federal Government?

• Increased government's role in U.S. society - increased federal spending.

• Decreased the government's involvement in economic affairs.

• Led to the elimination of federal social programs.

• Reduced federal spending and intervention.

Answer explanation

The Great Depression led to an increased role of the federal government in U.S. society, marked by significant federal spending on social programs and economic recovery initiatives, contrasting with previous limited government involvement.

Which of the following made the Great Depression worse? (Choose 3 options)

• rising unemployment

• Smoot-Hawley Tariff Act

• rising employment

• crop failures

• U.S. entry into World War Two

Answer explanation

Rising unemployment increased economic despair, the Smoot-Hawley Tariff Act worsened trade relations and deepened the recession, while crop failures led to food shortages, all contributing to the Great Depression's severity.

When the economy is not doing well in the U.S., who do people usually blame, and what tends to happen during elections?

• People usually blame the government, and incumbents often lose elections.

• People usually blame foreign countries, and incumbents are re-elected.

• People usually blame the media, and elections are unaffected.

• People usually blame local businesses, and incumbents win easily.

Answer explanation

When the economy struggles, people often blame the government for poor management. This dissatisfaction typically leads to a loss of support for incumbents (those in office) during elections, resulting in their defeat.

Hoover's "rugged individualism" can best be summarized as:

• The belief that individuals should rely on themselves and not on government assistance.

• The idea that the government should provide direct aid to all citizens.

• The belief that businesses should be owned and operated by the government.

• The idea that only wealthy people can succeed during hard times.

Answer explanation

Hoover's "rugged individualism" emphasizes self-reliance, meaning individuals should depend on their own efforts rather than seeking government help, making option A the correct choice.

What is the main concept discussed in the passage?

• the effects of the Great Depression on the government

• buying stocks on margin

• job loss created by the stock market crash of 1929

• the rising costs involved with buying fake butter

If Dave invests $10,000 and buys $20,000 worth of stock on margin, what happens if the stock value drops by 40%?

• Dave gains $8,000 in profit.

• Dave's original $10,000 is reduced to $2,000.

• Dave owes the broker $20,000.

• Dave's investment remains unaffected.

Analyze the risks associated with buying on margin as discussed in the passage.

• It guarantees higher profits.

• It doubles the buying power without any risks.

• It involves potential losses and interest costs.

• It eliminates the need of using any of your own money to purchase stocks.