1. Chapter 22 section 1 and 2 questions

2. Directions: Pages numbers to help you find answer for chapter 22 section 1 & 2
Ch. 22 section 1
#1-2 page 631
#3-4 page 632 #5
Uneven Prosperity page
Buying on Credit page 633
Too Many Goods, Too Little Demand page 633
Trouble for Farmers page 634
Ch. 22 section 2
#1-3 page 635
#4 page 636
#5 page
#6-7 page 637
#8 page 638

3. Chapter 22 Section 1: The Economy in the late 1920s

4. 1. What did people expect would happen to America after Republican Herbert Hoover was elected as president in 1928?
Good times would continue and even get better under Hoover

5. 2. What happened to the stock market in America during the 1920s?
Market soared until early Oct. 1929

6. 3. How did workers pay and benefits change since 1914?
Workers pay rose by more than 40% since 1914
Benefits were provided by employers (paid vacations, health plans and even English class for immigrants)

7. 4. Why did Americans have so much confidence in the economy in the 1920s?
Had faith in business, which seemed to be thriving

8. Uneven Prosperity
Huge corporations and rich families still held most of the nations wealth
71% of individuals and families earned less than $2500 a year
80% of families had no savings

9. Buying on Credit
Personal debt increased as people often borrowed money to buy products they could not afford
Installment plans made expensive items irresistible
Speculation-people practiced making high risk investments to get a high gain
Buying on margin-purchase stocks for only a faction of price 10-50% and borrow rest

10. Too Many Goods, Too Little Demand
Nations warehouses filled up with surplus goods
Wages risen but American consumers could not afford to buy goods as fast as factories produced them

11. Trouble for Farmers
Farmers began to borrow money to purchase new machinery in the 1920s
Farm prices began to drop and farmers could not repay loans
Lots of banks in rural areas went out of business

12. Chapter 22 Section 2: The Stock Market Crash

13. 1.What happened to the stock market in September 1929?
Dow Jones Industrial Average reached all time highs

14. 2. What happened to the stock market during the beginning of 1929?
Stock prices continued to climb

15. 3. What happened to the stock market on Black Thursday?
Not trusting Hoover investors around the country rushed to get money out of stock market which led to stock price to drop rapidly

16. 4. What happened to the stock market on Black Tuesday
4. What happened to the stock market on Black Tuesday? (October 29, 1929)
Investors worried about money raced to get their money out of the stock market and records 16.4 million shares were sold compared to 4 and 8 million shares a day
Collapse known as Great Crash

17. 5. How did the stock market crash affect workers and farmers?
Workers: American Factories closed-1000s people lost jobs or had cut in pay; Restaurants closed & people could not afford to eat at them
Farmers: Farm prices continued to fall which led to farmers losing farms

18. 6. How did the stock market crash affect banks?
People with loans to repay and nervous depositors rushed to withdraw their money
Banks closed when they could not give people their moeny

19. 7. How did the stock market crash affect the world?
Countries could not repay WWI debt = Allies could not repay America and Europeans no longer could afford to buy American made goods

20. 8. Name 3 real underlying causes of the Great Depression
Overspeculation: Speculation bought stocks with borrowed money, then pledge those stocks as collateral to buy more stocks
Gov’t Policies: monetary polices to blame
Unstable Economy: nations wealth was unevenly distributed with most money in hands of few families who tended to save rather than buy goods