The Stock Market Crash the Great Depression and

The Stock Market Crash, the Great Depression, and the New Deal

What was the Great Depression? • Period of severe economic hardship that lasted from 1929 to World War II

What were three causes of the Great Depression? • Overspeculation in stocks • Collapse of the banking system • Hawley-Smoot Tariff

What is speculation? • Buying something at a low price in the hope of selling it later at a profit

What is the largest stock market in the United States? • The New York Stock Exchange

What does it mean to buy stock on margin? • Buy stock on credit

What event triggered the Great Depression? • The Stock Market Crash

What functions as the central bank of the United States? • The Federal Reserve System

What acts as a banker’s bank? • The Federal Reserve

What controls the nation’s money supply? • The Federal Reserve

What is inflation? • When prices increase and the dollar buys less

What does the Federal Reserve do to stop inflation? • Raises interest rates

The Federal Reserve’s power to set ______ enables it to control the nation’s money supply? • Interest rates

What does the Federal Reserve do if it believes the economy is overheating and causing inflation? • Raises interest rates

What does the Federal Reserve do if it believes the economy is slowing down? • Lowers interest rates

What is a protective tariff? • A tax on imports that is so high that Americans cannot afford to buy foreign goods

What was the Hawley. Smoot Tariff? • Protective tariff • The highest tariff rates in history

The Hawley-Smoot Tariff was supposed to help American business. Why did this tariff law hurt the American economy?

• Foreign countries retaliated by passing high tariffs of their own. • This meant foreigners could no longer afford to buy Americanmade goods. • The decrease in foreign sales was greater than the increase in the sale of American-made goods within the United States.

What were five effects of the Great Depression on the United States?

• Unemployment increased • Banks closed • Consumer demand for goods dropped • Political unrest increased • Farm foreclosures increased

What was the unemployment rate among Americans by 1932? • 25%

Who was president when the Great Depression began? • Herbert Hoover

What was Herbert Hoover’s political party? • Republican

What president started the New Deal? • Franklin D. Roosevelt

What was Franklin Roosevelt’s political party? • Democrat

What was President Franklin Roosevelt’s program to end the Great Depression? • The New Deal

Who said, “The only thing we have to fear is fear itself? ” • Franklin D. Roosevelt

What the three R’s of the New Deal? • Relief • Recovery • Reform

What is reform? • Change for the better

What was the purpose of the New Deal “relief” programs? • Ease the suffering of the unemployed

Give an example of a New Deal “relief” program. • WPA

What did WPA do? • Paid people to work on public works projects

What are public works projects? • Construction projects paid for by the government • Benefit everyone

Give examples of public works projects.

• Roads • Schools • Bridges • Post offices • Parks • Libraries • Dams

What was the purpose of the New Deal “recovery” programs? • Help Business Recover

Give an example of a New Deal “recovery” program. • AAA

For what did AAA stand? • Agricultural Adjustment Administration

What did AAA do? • Paid farmers not to raise crops and livestock • By limiting supply, tried to raise livestock and crop prices

What was the purpose of New Deal “reform” programs? • Bring about change for the better in American society

Give two examples of New Deal “reform” programs. • FDIC • Social Security

For what does FDIC stand? • Federal Deposit Insurance Corporation

What does FDIC do? • Deposits at FDIC-insured banks are now insured up to at least $250, 000 per depositor through December 31, 2013

What did the Social Security Act provide? • Unemployment insurance • Old-age pensions

What brought an end to the Great Depression? • World War II

What is another name for organized labor? • Unions

Were labor unions active during the Great Depression? • Yes

What three rights did workers gain during the New Deal? • Right to form a Union • Right to Strike • Minimum Wage

Since the New Deal, who do Americans hold responsible for bringing prosperity to the U. S. economy? • The federal government, especially the President