A Worldwide Depression Chapter 15 Section 2

Warm Up Vocabulary Economic downturn = A severe downturn in the economy Ideas What happens in a depression? Record class responses Visual How do the picture and graphs relate? Explain in your own words

Postwar Europe, page 470 Work with your partner (A/B partners) Read section OUTLOUD together Fill in the chart TOGETHER Identify the problems (Implied or clearly stated) List them Identify any possible solutions to each problem Describe how each problem/solution worked out

The Weimar Republic, page 471 Germany lacked strong democratic tradition. Germany had too many political parties. Many Germans blamed the Weimar Republic for their loss in WWI and the punishment of Germany in the Treaty of Versailles. The republic took the blame for the war not the wartime leaders, because they signed it. The WR leaders understood the terms were not going to benefit Germany but felt cornered to sign it.

Inflation Causes Crisis in Germany, page 471 Flow chart follows inflation cycle in Germany Expenses Spends Prints Money – Down Up Continues Collapsing

Attempts at Economic Stability, page 471 & Efforts at Lasting Peace, page 471-472 Work with your partner (A/B partners) Read section OUTLOUD together Answer the questions TOGETHER. Use complete sentences Avoid the terms “it”, “them”, “they”

Financial Collapse Slide 1 The U.S. financial success supported many other countries though __________________ loans In 1929, the U.S. economy ________________ bringing the world’s economy down with it. failed

Financial Collapse Slide 2 Three major problems with the U.S. economy were ___________ distribution of wealth Uneven ___________ by business and agriculture overproduction Americans buying ________ less

Financial Collapse Slide 3 Business Overproduction U.S. made ______ of the world’s industrial goods One-half Overproduction created huge ______________ profits Most families were too ____ to buy goods, only the richest people earned large enough salaries to support buying goods poor Businesses ___________orders due to lack of sales reduced __________ was then reduced by manufacturers which led to layoffs production This system created a bad _____ cycle economic

Financial Collapse Slide 4 In the 1920’s, improved ______ methods and machinery increased crop yields, or amounts of food scientific Overproduction and competition from foreign countries forced prices ________, leading to less profits down Farmers did not make enough profit to pay ____________, forcing some farms to close loans Unpaid loans made banks _________ fail

Financial Collapse Slide 5 The stock market was centered in ______ _________ New York People wanted to get ________ on stocks and bought on margin Rich Buying on margin means buying stocks on a _____________ with a small down payment loan As long as prices go _____, people could sell stocks pay off loans and pocket the rest of the profit up If prices went _____, they could not sell the stock at a profit to repay the loans down

Financial Collapse Slide 5 Part 2 Some stockholders started to _____________________ that stock prices were higher than they should be, and started to sell them worry This worry led to wide scale ____________________ with stockholders panic So many stocks were sold at one time, with no one buying them up, that the stock market _________________________ crashed

The Great Depression Slide 6 Due to the stock market crash, the U.S. fell into the Great Depression, where business production declined and ________________________________ increased in large amounts unemployment People lost their money in ________________________________ accounts because banks had no money to give to account holders savings Farms were __________________ because loans could not be repaid to banks lost

The Great Depression Slide 7 America responded to the economic downturn by U.S. banks demanding ___________________________ of loans from Europe repayment Americans that had invested in Europe were taking their money ______________________ back The U.S. placed high tariffs, or taxes, on European goods so people would ___________ American goods and money stayed in the U.S. buy

The Great Depression Slide 7 – Part 2 Foreign nations ______________________ to U.S. tariffs by increasing their tariffs on U.S. products, hurting the U.S. economy further responded World trade dropped _________________%! 65% The economy got _______________________ worse __________________________________ went sky high unemployment