1. ECONOMICS OF THE GREAT DEPRESSION

2. CAPITALISM IN A FREE MARKET SYSTEM
Buyers and sellers enter into transactions freely
Ability to make economic decisions
Individuals own private property
Freedom to risk wealth in business venture
Ability to determine what to buy and price willing to pay

3. Capitalism “Perfect Market”
Market will reach a state of “equilibrium where the seller is willing to sell units of goods for the price that consumers are willing to pay

4. Business Cycle

5. Output

6. GROSS DOMESTIC PRODUCT (GDP)
Final monetary value of all finished goods and services in a fiscal year
Intermediate goods are used to make finished products and are not included in final total of GDP
Real GDP is adjusted for inflation

7. Nominal GDP (trillions)
Year 
GDP Growth Rate
Real GDP (trillions)
Nominal GDP (trillions)
GDP per Capita
Inflation
1929 NA
$1.057
$.105
0.6%
1930
-8.5%
$.967
$.092
-6.4%
1931
$.905
$.077
-9.3%
1932
-12.9%
$.788
$.060
-10.3%
1933
-1.3%
$.778
$.057
0.8%
1934
10.8%
$.862
$.067
1.5%
1935
8.9%
$.939
$.074
3.0%
1936
12.9%
$1.061
$.085
1.4%
1937
5.1%
$1.115
$.093
2.9%
1938
-3.3%
$1.078
$.087
-2.8%
1939
8.0%
$1.164
$.094
0.0%
1940
8.8%
$1.266
$.103
0.7%
1941
17.7%
$1.490
$.129
9.9%

8. Depression Era Unemployment Statistics Percentage of Labor Force
Year
Population
Labor Force
Unemployed
Percentage of  Labor Force
1929
88,010,000
49,440,000
1,550,000
3.14
1930
89,550,000
50,080,000
4,340,000
8.67
1931
90,710,000
50,680,000
8,020,000
15.82
1932
91,810,000
51,250,000
12,060,000
23.53
1933
92,950,000
51,840,000
12,830,000
24.75
1934
94,190,000
52,490,000
11,340,000
21.60
1935
95,460,000
53,140,000
10,610,000
19.97
1936
96,700,000
53,740,000
9,030,000
16.80
1937
97,870,000
54,320,000
7,700,000
14.18
1938
99,120,000
54,950,000
10,390,000
18.91
1939
100,360,000
55,600,000
9,480,000
17.05
1940
101,560,000
56,180,000
8,120,000
14.45
1941
102,700,000
57,530,000
5,560,000
9.66

9. INFLATION/DEFLATION Value of money decreases with Inflation
Cost (price) of goods and services rises
Deflation
Cost (price) of goods and services decreases

10. Year
Jan-
Feb-
Mar-
Apr-
May-
Jun-
Jul-
Aug-
Sep-
Oct-
Nov-
Dec-
1930
0.00%
-0.58%
-0.59%
0.59%
-1.75%
-4.05%
-4.62%
-5.20%
-6.40%
1931
-7.02%
-7.65%
-7.69%
-8.82%
-9.47%
-10.12%
-9.04%
-8.48%
-9.64%
-9.70%
-10.37%
-9.32%
1932
-10.06%
-10.19%
-10.26%
-10.32%
-10.46%
-9.93%
-10.60%
-10.67%
-10.74%
-10.20%
-10.27%
1933
-9.79%
-10.00%
-9.35%
-8.03%
-6.62%
-3.68%
-2.22%
-1.49%
-0.75%
0.76%
1934
2.33%
4.72%
5.56%
5.51%
2.29%
1.52%
3.03%
2.27%
1935
3.01%
3.76%
2.24%
0.74%
1.48%
2.22%
2.99%
1936
1.47%
0.73%
-0.72%
1.46%
2.19%
1.45%
1937
2.17%
3.65%
4.38%
5.11%
4.35%
4.32%
3.57%
4.29%
2.86%
1938
0.71%
-0.70%
-2.08%
-2.76%
-3.42%
-4.11%
-3.45%
-2.78%
1939
-1.41%
-1.42%
-2.82%
-2.13%