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Chapter 8 Notes

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Chapter 8 Notes Chapter 8 Notes Presentation Transcript

  • Jumpstart Assignment
    Do you think it’s possible for America to ever experience a second Great Depression. Explain your answer.
  • Causes of the Great Depression
    The 1920’s were a time of great prosperity for most American’s.
    Republican’s took credit for the bullish economy
    1928, Americans voted overwhelmingly for Herbert Hoover, prosperity, and the Republican economic policy.
  • Problems in the Economy - Farmers
    Farmers made up 25% of the American workforce.
    WWI caused prices of crops to soar, at the same time, new machines made farming more efficient.
    Demand falls for crops at the end of war, and at the same time farmers are producing more crops.
  • Problems in the Economy - Wealth
    In the 1920’s wages rise slowly (8%) while productivity increased rapidly (32%).
    Corporate profits skyrocketed (65%).
    60% of Americans earned <$2,000/year
    24,000 families made more than $100,000/year
    The rich weren’t buying 50 times as much, though they were making 50 times as much.
    Lack of a strong middle class
  • Problems in the Economy - Credit
    Easy credit (installment buying) makes American’s feel richer than they are.
    60% of cars were bought on credit
    80% of radios
  • The Stock Market Crashes
    Many American’s poor money in to the stock market speculation – putting money that you don’t have in the market, gambling that it will go up.
    October 29, 1929 - Black Tuesday – stock market crashes, fortunes are wiped out in a matter of hours.
    Represented a hallmark of the nations business cycle – periodic growth and contraction in the economy
  • The Depression Begins
    The Great Depression lasts from 1929 – 1941, a period in which the economy failed and unemployment soared.
    Banks collapse – depositors fear that they might lose their money and storm the banks to get their money.
    The Federal Reserve restricts money supply, which makes the problem worse.
  • Depression Continues
    Businesses close, causing unemployment to rise.
    Tariffs further slow down the economy
    Hawley-Smoot Tariff – raises the price of foreign imports so high that they cannot compete in the American market.
    • The Depression spreads to the rest of the world.
  • Jumpstart Assignment
    Get into the groups you were in on Thursday and finish your summaries.