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We have a QUIZ on Day 2 of the 1920s. Look over your notes and pay special attention to economic policy and causes of the stock market crash.

Published byPhillip Nash Modified over 9 years ago

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Presentation on theme: "We have a QUIZ on Day 2 of the 1920s. Look over your notes and pay special attention to economic policy and causes of the stock market crash."— Presentation transcript:

1 We have a QUIZ on Day 2 of the 1920s. Look over your notes and pay special attention to economic policy and causes of the stock market crash.

2 Hoover to Roosevelt

3 Cite and explain evidence that led to the transition of the U.S. economy from laissez- faire capitalism to an increasingly regulated economy. Critique the government‘s use of tariffs and trade agreements. Evaluate deficit spending as a means of financing government programs.

4

5 Food Stamps Social Security

6

7

8 1. Easy Credit/Rising Personal debt 2. Speculation/Buying on Margin 3. Overproduction 4. Bank Runs

9 They mention some causes we don’t, there were MANY…we’re hitting the main ones

10 People got easy credit to buy a lot of stuff (cars, appliances). When the market goes bad, they can’t repay their debts

11 People took big gambles on Wall Street hoping to get rich quick People made investments on borrowed money (buying on margin)

12 As supply goes up, demand goes down. This means prices fall. This happened to farmers with their crops, it happened to the auto industry and industries that depended on it (steel, rubber, glass, etc.) SupplyDemand/ Price

13 Banks depend on people putting their money into them…they use that money to loan out and make money When the market started to fall, people panicked and withdrew their money…banks go broke. By 1933 – 11,000 of the 25,000 banks nationwide had collapsed

14 Bank Run

15 Great Depression stats 25% unemployment (today we’re at around 9%) The US lost a total of $30 billion the week of the stock market crash Hawley-Smoot Tariff Act Reconstruction Finance Corporation Hoover’s Response

16 Reconstruction Finance Corporation Gave money to big businesses, railroads, insurance companies Purpose: prosperity at the top would “trickle down” to the rest of the population Puts a tariff in place Taxes imported goods (stuff from foreign countries) so that foreign goods are more expensive. Encourages people to buy American products. Hawley Smoot Tariff Act

17 “Trickle-down Theory” really doesn’t work…

18

19 Says he will support people directly through relief, recovery and reform

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