Chapter 21 The Great Depression: Section 1- Causes of the Depression (1)

In the 1920’s what did most Americans experience?
Many people enjoyed a sense of prosperity.Refer to your answer to questions 9 and 10

What political party enjoyed power the 1920’s and watched the country grow increasingly prosperous with consumption, the gross domestic product, and the stock market all going up?

Who did thr Republicans choose as their president for the 1928 election?
Herbert Hoover

Describe Hoovers life before the presidency.
1. Born in Iowa; orphaned as a child.
2. Graduated from Standford Universiy (geology).
3. Became mining engineer and traveled the world.
4. Rich.
5. Devoted to public service.

As the secretary of comerce, what was Hoovers business philosophy?
1. Stressed the importance of competition.
2. Believed in cooperation between labor and management.

6. What did American farmers do during the war that caused them difficult times in the 1920’s?
They increased their harvest yields and bought more land. They also bought costly equipment and mechanized farm equipment.

With farmers not having the cash to buy new consumer goods, what did they live on from month to month?
They loved on credit, often teetering on the brink of financial ruin.

How did the industrial workers fair during the 1920’s? Explain
Their wages rose steadily, as did their disposable income.

What was the problem with the worker’s wages in relation to productivity?
While wages rose gradually, worker productivity increased astronomically.

During the 1920’s how did corporates profits far?
They skyrocket 65%

In 1929, what did the wealthiest 1% of the population earn in relation to the bottom of the population?
About the same as the bottom 42%

Refer to your answers to questions 9 and 10, what do some economist believe created the US economic problems? why?
Economist believed that the uneven distribution of the nation’s wealth created economic problems. Twenty four thousand of the countries wealthiest families enjoyed annual incomes of more than $100,000, which was 50 times more than what most families were earning.

What does a health economy need? why?
It needs more people to buy more products which in turn creates an even more wealth. In this way, a health economy avoids underconsumption that can limit economic growth.

How did many American buy automobiles, appliances, radios, and etc?
They bought these things on credit. They used the installment plan, paying a small percentage down and the rest over a period of months or years.

By using credit, what did Americans accumulate?
Every year American accumulated debt.

Before the 1920’s, how did American buy things? why?
Before the 1920’s people would put off buying goods until they had the cash to pay for those items. They feared debt and put off buying goods until they had the money.

In 1929, what were the soaring stock prices based on? Why was this a problem?
Soaring stock prices were based on little more than confidence. Prices had no basis in reality. Too much money was being poured in stock speculation.

What is stock speculation?
Gambling with money you don’t have, on stock increased to turn a quick profit.

Describe what happened from Sept 3, 1929 to October 24, 1929.
Prices peaked and then slid downward in an uneven way. At the end of October however, the slide gave way to a free fall. After the Down Jones average dropped 21% points in 1 hour on October 23 many investors concluded that the boom was over. On Oct 24th, known as Black Thursday with the confidence in the stock market failing, nervous investors stared to sell

With this happening, what did investors do with their money in the stock market?
Nervous investors started to sell. They pulled their money out of the stock market.

Describe what happened on “Black Tuesday” (October 29, 1929.
On Black Tuesday, Oct 29th, the bottom fell out. More than 16 million shares were sold as stock market collapsed in the great crash.

What is the nations’ business cycle?
The nations’ business cycle is the fluctuation in economic activity that an economy experiences over a period of time. It is basically defined in terms of periods of expansion and recession.

price support the maintenance of a price at a certain level through government intervention. credit an arrangement in which a buyer pays later for a purchase, often on an installment plan with interest charges. WE WILL WRITE A CUSTOM ESSAY …

the day of the stock market crash october 29th, 1929 black tuesday another name for the periodic expansion & contraction of the economy business cycle WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY …

Roaring Economy to Great Depression It made the economy weaker. What effect did the use of credit have on the economy in the 1920s? WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR ONLY $13.90/PAGE …

Why did the economy collapse after the stock market crash? Because everyone invested all thier money in the stocks and most of the people had loans out so whrn all that failed all the money was gone. Why do you …

Who were the republican and decomcratic candiadatates running in the election of 1928? Herbert hoover (R) Alfred E Smith (D); smiths religion became a campaign issue. Hoover won What is a bull market? A long period of rising stock prices …

Which group experienced an early depression in the 1920’s? Farmers During the 1920’s, the United States economy moved through which phase of the business cycle? Expansion WE WILL WRITE A CUSTOM ESSAY SAMPLE ON ANY TOPIC SPECIFICALLY FOR YOU FOR …

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