A global depression

Objective: Students will discover the functions of our world economy and be able to summarize how it operates through their Cornell notes.

Setting the Stage Late 1920s Almost every European nation was bankrupt European nations were rebuilding war-torn economies Aided by loans from the U.S. Only Japan and U.S. came out of WW1 in better financial shape than before

Germany Faced enormous economic problems Had to pay heavy reparations to the Allies – the mark was worth very little U.S. steps in and loans Germany 200 million to help them recover

The Great Depression Late 1920s If the U.S. economy weakened, the whole world’s economic system might collapse In 1929, it did…

A flawed U.S. economy Despite U.S. prosperity, there was 3 weaknesses in the U.S. economy Uneven distribution of wealth Overproduction by business and agriculture Lessening demand for consumer goods

Uneven Distribution of Wealth Nearly half of the world’s industrial goods came from the U.S. Led to enormous profits Richest 5% received the majority of the profits 60% (mostly factory workers) earned less than $2000 a year Unable to afford goods being produced = stores unable to sell goods = factories had to laid off workers Downward spiral has begun

Overproduction New farming methods + new machinery helped with agriculture + industry Competition all over the world = drove prices and profits down Farmers and factory owners could not sell their goods for a profit Forced many farms and factories to close down

No demand for consumer goods Many citizens either Made very little money Had no job or laid off Could not afford to buy any goods

JTPS What were the 3 weaknesses within the U.S. economy? Explain each weakness and elaborate on why it was a problem and how they are each connected.

U.S. fails = World fails Collapse of American economy sent shock waves around the world World trade dropped 65% Europe gets hit hard – many relied on loans and investments from the U.S.

A New Deal Franklin D. Roosevelt Began a program called the New Deal Program created projects to help provide for more jobs Government agencies gave financial help to businesses and farms Government spending helped to create new jobs and start a recovery

QW #8 – Our Economy Objective: Students will review the functions of our world economy and demonstrate their understanding as measured by their QW writing prompt.

QW #8 – Our Economy Explain how our economy works . What helps our economy to function? What detracts from our economy and causes it to collapse? Elaborate in detail. 1 paragraph Pg. 472