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Causes of the Depression Flashcards | StudBud
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Causes of the Depression
Causes of the Depression
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US History Great Depression Review
Flashcards
10 cards
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Practice quiz
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Questions
10
Answers
1
What happened on Black Tuesday?
People sold their stocks, causing the market to crash
Smoot-Hawley Tariff took effect
People went shopping after Thanksgiving
Banks closed because of bank runs
2
What happened to traditionally strong industries (railroad, steel, etc.) during the 1920's?
They became more profitable
They invested heavily in stock
They became less profitable
They began buying their own banks
3
What economic view was held by President Hoover?
Keynesian Economics
Laissez-Faire
Government should provide welfare
Economy could not fix itself without government aid
4
Why did Banks lack funds?
The government had taken the money in taxes
Farms had lost value and were being foreclosed on
Individuals had not been depositing money during the 1920's
They had invested heavily in the stock market
5
Which best explains
speculation
?
Decreasing prices to allow people to buy products
Panicking and pulling your money out of the bank
Buying stocks in search of quick profit
Buying stocks with credit
6
Which best explains
buying on margin
?
Purchasing food with money from the bank
Buying stocks for a short term profit
Saving money until you have extra to spend
Borrowing money to buy stocks with
7
What was happening to the prices of farm goods during the 1920's that would lead to depression?
Prices were stagnant, causing inflation
Prices caused farmers to produce less
Prices increased to where people couldn't afford food
Prices decreased to where farmers were going bankrupt
8
How were people (70% of which were below poverty income) paying for things during the 1920's?
Theft increased
They increased their saving rate
They hoarded gold
They bought on credit
9
Which is an effect of bank runs?
The Smoot-Hawley Tariff
Dust Bowl
Banks close because they have no funds left
Most people are able to keep their money secure
10
What effect did the Smoot-Hawley Tariff have on American Industry?
It raised the price of foreign goods, creating American jobs
It limited overseas markets, harming American business
It increased immigration, providing more workers
It decreased taxes, making entrepreneurship more profitable
