1. The Causes of the Depression
Notes 13.1

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

3. 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

5. 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

6. 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

7. Hidden Economic Problems in the Roaring Twenties

10. 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

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

13. 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

14. 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?

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

16. The Great Depression Begins

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

18. 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'?

19. 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

20. 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

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

22. 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.

23. 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