Depression - a period of low economic activity and high unemployment Recession - a period of temporary economic decline during which trade and industrial activity are reduced Hyperinflation (HI)– out of control inflation Inflation – prolonged increase in the price level of goods and services
The Great Depression Started in Europe
Worldwide event
Causes Severe War Damage
2. Heavy money penalties against Germany
(With German money – expenses still increase)
Soldiers come home – replace workers – led to increase in unemployment
Germany
Heavy Fines Lost land and resources to Treaty of Versailles
Met Great Britain & France’s goal – Germany cannot start another war
Germany’s weak economy hurt trade and production in W. Europe
1923 France seizes Ruhr Valley – Germany’s main industrial region
Germany cannot become economically viable Germany cannot make war payments
Germany starts to print a lot of money with no economic support
Caused hyperinflation -devalued money across Europe
The depression in the 1930s was a __________________. What led to the worldwide depression? After World War I, Germany printed money it didn’t actually have in order to pay war reparations. Across the European continent, the value of money decreased and the price of goods increased. What is this known as? Define inflation –
To help ensure Germany’s recovery Dawes Plan 1924 To help ensure Germany’s recovery
Reduced reparations Germany owed Set payments that Germany could handle American investors lend $200 million to Germany ----
Europe
Nations not buying or investing in foreign goods
US acts as bank for Europe (Germany best customer)
US economy goes bad – asks for full payment of loans and stops lending
European economies start to suffer – can no longer trade Africa, Asia, S. America start to decline
Which country loaned money to European nations to help pay for WWI reconstruction?