NEXT An economic depression in the United States spreads throughout the world and lasts for a decade. Section 2 A Worldwide Depression.

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NEXT An economic depression in the United States spreads throughout the world and lasts for a decade. Section 2 A Worldwide Depression

NEXT Postwar Europe A Worldwide Depression Unstable New Democracies Fall of kingdoms, empires creates new democracies in Europe People have little experience with representative government Some form coalition governments—temporary, multi-party alliances Frequent changes in government create instability SECTION 2

NEXT Democracy in Germany Weimar Republic—Germany’s democratic government formed in 1919 Government has serious weaknesses The Weimar Republic Inflation Causes Crisis in Germany Value of German currency falls dramatically Attempts at Economic Stability American loans help revive German economy Efforts at a Lasting Peace Germany and France sign treaty pledging no more war Many nations sign a similar agreement, the Kellogg-Briand pact Image SECTION 2

NEXT Financial Collapse A Flawed U.S. Economy Weaknesses in American economy cause serious problems Wealth is distributed unevenly Most people are too poor to buy goods produced Factory owners cut back on production, lay off workers Farmers produce more food than people can eat Many farmers cannot repay loans and lose their land SECTION 2 Continued...

NEXT continued Financial Collapse The Stock Market Crashes Stock prices soar Many people buy stocks on credit Investors begin selling stocks, which lowers prices On October 29, 1929, stock market collapses as prices fall very low SECTION 2 Chart

NEXT Economic Downturn Great Depression—long business slump of 1930s Marked by bank failures, loss of savings, unemployment The Great Depression A Global Depression American economic problems create problems in other countries World trade falls sharply Effects Throughout the World Germany and Austria suffer greatly, as do Asia and Latin America Chart SECTION 2

NEXT The World Confronts the Crisis Britain Takes Steps to Improve Its Economy British voters elect coalition government, avoids political extremes Government brings about slow, steady economic recovery Preserves democracy by avoiding political extremes SECTION 2 Continued...

NEXT continued The World Confronts the Crisis France Responds to Economic Crisis France has more self-sufficient economy Preserves democracy in spite of economic troubles SECTION 2 Image Socialist Governments Find Solutions Public works programs help Scandinavian countries recover Recovery in the United States Franklin D. Roosevelt—American president during Depression New Deal—Roosevelt’s program of government reform to improve economy