The Causes of the Depression Notes 13.1

Notes 13.1 Key Terms business cycle speculation Black Tuesday Great Depression Hawley-Smoot Tariff

Hidden Economic Problems in the Roaring Twenties The business cycle is a part of capitalism Republican Presidents took credit for prosperous economy 1920s –phase of expansion Hoover easily won Election of 1928 focused on competition and voluntary cooperation

Hidden Economic Problems in the Roaring Twenties Crop prices fell after WWI Demand was less More mechanized farming Farmers did not have a 1920s boom and lived on credit

Hidden Economic Problems in the Roaring Twenties There was a significant gap between rich and poor Under consumption happens when there is not enough people to buy what the economy is producing Americans bought on easy credit Cars, radios, and stocks

Hidden Economic Problems in the Roaring Twenties

The Stock Market Hits Bottom Stock prices were based on confidence Speculation-make high risk investments to get big profits Black Tuesday-Oct 29th the stock market crashed, billions of dollars were lost

The Stock Market Hits Bottom Dazed investors gathered outside the New York Stock Exchange as the stock market crashed on October 29, 1929.

The Great Depression Begins Great Depression is when economy faltered and unemployment soared Banks were the first to be affected, people withdrew money 3K banks failed, Federal Reserve limited money supply

The Great Depression Begins Which two countries' tariff rates grew the most between 1928 and 1932? How would the rise in tariff rates affect the price of goods imported from these countries?

The Great Depression Begins Businesses began to close and cut back 1933-25% had lost jobs Hawley-Smoot Tariff-raised taxes on foreign goods European countries retaliated and enacted their own tariffs

The Great Depression Begins

The Great Depression Begins Germany ceased reparation payments France and Britain stopped war debt payments Depression was global

The Great Depression Begins According to the Per Capita Income and Spending graph were Americans as a whole going into debt during the depression, or were they 'just getting by'?

The Causes of the Great Depression Milton Friedman-too little money in circulation John Maynard Keynes-lack of government influence led to depression, laissez-faire did not work

Quiz: Hidden Economic Problems in the Roaring Twenties Which factor led to underconsumption during the late 1920s? A. expansion of credit B. poor agricultural conditions C. uneven distribution of wealth D. shortage of consumer products

Quiz: The Stock Market Hits Bottom What fueled the high stock prices of the 1920s? A. chance B. confidence C. patriotism D. skill

Quiz: The Great Depression Begins How did the Great Depression affect American workers? A. They had to learn to use new technology. B. Almost one fourth of all workers were unemployed. C. Work conditions declined in safety and cleanliness. D. They were forced to work longer shifts for lower wages.

Quiz: The Causes of the Great Depression According to John Maynard Keynes, what was the main cause of the Great Depression? A. over-speculation B. uneven distribution of wealth C. a sudden decrease in the money supply D. a lack of government interference in the economy