Great Depression unit test study guide

What happened during FDR's presidency?

-Economy continued to decline during the Great Depression -Took over the problems that Hoover experienced

What did Hoover do to fix it?

-Increased taxes and tariffs -Tried to make programs to create jobs -This seemed to make the depression worse

What happened during Hoover's presidency?

-Laissez Faire policies -Production went down -Prices dropped -Foreign trade shrunk -1 out of 4 Americans couldn't find work -Crime and death rates increased

When did Hoover become president?

1929

What was the civilan Conservation Corp? And was it relief, reform, or recovery?

A temporary work program that gave millions of mean jobs. (Relief)

How many people were unemployed when FDR started as president? Explain the example in the video:

About 25% of the working population, which was about 3 million people. At The US steel homestead PA about 52,00 were working before and after only 420 were.

How did the Fed fail at its job?

Before the great depression, the stock market was big. People were putting large amounts of money into it, ad they got that money by taking out loans. People took out lots and lots of loans that they couldn't pay bay because they assumed the stock market would go up. The Fed should have not let the banks give so many loans, and they paid the price for it.Federal Reserve raised interest rates too much, trying slow the Growing stock market, also that with deflation, more people were going into debt making the banks lose money.

What is recovery?

Begin to fix the economy by making things go back to normal ( medium term)

What was the bonus army

Bonus Army, gathering of probably 10,000 to 25,000 World War I veterans (estimates vary widely) who, with their wives and children, converged on Washington, D.C., in 1932, demanding immediate bonus payment for wartime services to alleviate the economic hardship of the Great Depression.

Why do you not want to buy on margin?

Buying on the margin is risky. If you lose money in the stock market, you cannot pay back the bank with your borrowed amount.

What is buying on margin?

Buying on the margin is when people borrow money from the bank and use it to invest in the stock market

We're the bonus army's goals met? How did this effect president Hoover?

Congress rejected the protest and it was a failure. Hoover sent a general to take out the protesters so many people so his leadership was considered a defeat. Hoover was greatly blamed for the depression.

What is credit, and why was it a problem?

Credit is when people purchase something, and then pay for it later. This became a problem because soon, no one had enough money to pay back the bank (or anyone). They started to lose valuable things such as houses, jobs, clothing, and household items due to this.

How did credit affect Farmers?

Farmers lost a lot of their land for crops, since they couldn't pay back their debt. They also weren't able to sell their crops to other people, since everyone was in need of money. Farmers lost their land when they couldn't ask for anymore loans from the banks, in order to support their farm and land.

What does it mean to reform?

Fix the financial system so this can never happen again. (Long term)

How Overproducation caused the Great Depression

In world war 1, the US was producing enough food to provide for themselves and for all their allies. After World War 1, the US was over producing food. This caused the product's prices to fall drastically and workers quit their jobs, which led to the factories closing down. This led to people wanting to take large sums of their savings out of banks, which in return caused the bank to go bankrupt and eventually close. In addition, because so many businesses were closing, which had a large impact on the economy and the individual finances of families/people.

What was the Federal Deposit Insurance? Was it relief, recovery, or reform?

Insures that money that is put into banks and supervises banks to protect people. (Reform)

What was the Tennessee Valley Authority?

It provided jobs and electricity for areas that didn't have it before. (Relief)

What was the Securities and Exchange Commission (SEC)? Was it relief recovery or reform?

It regulated the stock market. IAT prevents investors from manipulating the stock. (reform)

What was the Glass-Steagall Act?

It segregated commercial banking and investment banking (Reform)

When did FDR become president?

March 4, 1933

What was the Agricultural Adjsutment act?

Offered farmers money to produce less crops

What was the Agricultural Adjustment Act? Was it relief rectory or reform.

Offered farmers money to produce less crops. Brought prices of crops down. (Recovery)

Why did Buying on Margin worsen the Great Depression?

Once the stock market crashed, people tried to sell their stocks to pay their banks back, but no one purchased them, worsening the Depression.

How did overspeculation cause the Great Depression?

Over speculation caused the Great Depression because many people had invested most of their money when the stock market crashed.

What is overspeculation?

Over speculation is when people overestimate how stocks are changing and investing. As a result, they usually lose a lot of money when the stocks go down.

Causes of overproduction

Overproduction in the late 1920s was caused by farmers producing more food and resources than necessary. This caused the prices to drop. They were not making enough money, so thousands of workers were laid off. This was followed by companies closing, and eventually led to The Great Depression. Another way this lead to the Great Depression was the fact that in the 1920s, the demand for many products was very high. However, as the depression started, the demand decreased and the production didn't.

Overproductions Impact on businesses

Overproduction made business have to sell products for less money (or they weren't selling products at all), which made them have to lay off employees because they weren't making any/enough money. Because of this, some businesses were even forced to close.

How did credit play a role in the Great Depression?

People paid for stock, houses, and many other things on credit, and when the banks crashed, companies couldn't afford to keep paying workers. This caused many people to go out of work, leaving people with no way to get the money they thought they would earn back to pay back their debt. In order to pay back the bank, they would be kicked out by landlords and banks in order to get rid of debt. This made the great depression worse, because of the fact that more people were impacted each time jobs were less available.

How was agriculture (farming) affected during the Great Depression?

People were not able to make a living on their farms because there was no one to buy the crops they sold. There was also a great drought which made it hard to grow crops.

What was the Work Progress Administration? Was it recovery, relief or reform?

Provided millions of jobs to Americans. Built highways schools airports and more. (Relief)

What is relief?

Providing help to reduce the suffering of the poor and unemployed. (Short term)

How do tariffs work/What are tariffs

Tariffs are a price you have to pay to ship goods in and out of the country. This reduces the amount of imports/exports in a country, hurting the economy.

What is the federal reserve

The Federal Reserve is the national bank of the United States tasked with monitoring financial systems and supporting the economy of the country.

How did the Federal reserve affect the Great Depression?

The Federal Reserve let the banking system collapse, which made money supplies break down and prices fall.

How did tariffs cause the great depression?

The Smoot Hawley Tariff act of 1930 contributed a lot to great depression. This act increased tariffs on foreign imports to the U.S. by about 20%. As a response to this act, other countries increased their Tariffs on American goods. This had a big impact on trading because it now was much more expensive to trade in and out of the county. Global trading plummeted, contributing to the effects of great depression

Describe how the US relocated people during the Great Depression and why it was photographed:

The US relocated people who were living on farmland that had been "expired and depleted". They moved people who lived in Urban areas to places with better housing. These conditions were photographed because at the time many places didn't have electricity so they were photographed and put into Newspapers and magazines so that they would be able to spread awareness. They wanted the government to do something about this so they photographed the places where they wanted government interventions.

Describe the condition of the US economy in 1932:

The economy was falling apart, there was a 40% economic decrease in 4 years and 25% of people were unemployed.

Explain the effects the Great Depression had on many people in the country:

The effects were that many people were unemployed and they lost their home and belongings. In October of 1933 in New York city 1.2M were dependent on the government for support.

How did FDR fix it?

The new deal

Describe the living conditions in city shelters:

The shelters were filled to capacity and served watery oatmeal and thin black coffee. They were filled with nightly human stench.

Explain the significance of Franklin Roosevelt accepting the presidential nomination in person:

The significance was that by going there, he was able to develop a connection by being able to deliver his speech in front of thousands of people. This gave people hope of optimism to hear him.

What is overproduction?

When company's make too many of the product.

Why were tariffs such a high problem in the 1920's

While tariffs generated revenue for the government is started to hinder the ability of trade to internationally. This was a problem because it was difficult sell inside the country since many people were in debt due to the stock market crash.

Why should you avoid overspeculation?

You want to avoid over speculation because if the stock market crashes, you might not be prepared for it.