1. Knowledge Connections Definition Picture Term Vocabulary  RecessionDepression

2. Essential Question What caused the worldwide depression?

3. How was the European economy after the war? After the war, most nations were left owing huge amounts of money Victory was not cheap… Wartime spending was higher than any taxes or trade brought in Defeated nations, like Germany, faced the extra burden of reparations to the Allies

4. How was the American economy after the war? The US economy was much stronger than other nations Why? No fighting had taken place on American soil After the war, American factories were producing most of the world’s goods! The US had entered the war late and kept its costs low

5. How did the US help Europe after the war? The US acted as the world’s bank by loaning money to other nations To make a profit, the US needed European nations to repay their loans with interest…. The US was headed for trouble That rarely happened!

6. What other factors weakened the US economy? Buying on the Margin People bought stock and only paid for part of the costs, the borrowed the rest from stockbrokers Risk taking buyers Some buyers “gambled” on the stock market in hopes of making a profit. Stock prices were built up beyond their real value

7. What happened in October 1929? Stock prices became so high, that less people could afford to buy stocks With less investors, prices begin to drop Nervous investors begin to sell as well October 29, 1929 – The Stock Market “crashes”

8. How does that lead to a depression? People begin taking money out of the bank to repay loans Banks loan more money than they have Without money, many banks are forced to close At this time in history, when a bank closes, customers lose everything!!!

9. How did this depression affect the American people? Cause: banks and factories closed People lost their jobs People lost their homes Banks took farms Effect: The Great Depression lasted more than a decade

10. How did this affect the world? The rest of the world was having a hard enough time rebuilding after the war The US tried to put tariffs on exported goods in order to gain money The US could not afford to assist Europe like it had done before As a result, European banks and business began to fail

11. Essential Question What caused the worldwide depression?

12. Worldwide Depression Timeline