Chapter 24: The Great Depression
Summary
The period in United States history most discussed in contemporary times is the Great Depression era.
Between 1929 and 1933 unemployment rose to 25 percent, bread lines snaked through cities, roads
filled with vagrants, nine thousand banks failed and national output plunged. This chapter presents
competing views on what caused the economic problems experienced by the U.S. (and the rest of the
world) between 1929 and 1941.
Key Terms and Concepts
Compensating fiscal policy
Keynesian view
Mixed economy
Monetarist view
International view
Teaching Tips
1. Focus on real GDP during the Great Depression era between late 1929 and 1941. Using
statistics, ask student groups of three or four to define the Great Depression in terms of changes
in real GDP. Now ask them to break down GDP into its various components and do the same.
Have them summarize their findings.
2. Break the class up into four student groups. Assign each group to explain the forces behind the
Great Depression using one of the following paradigms: neoclassical, Keynesian, monetarist,
and international. Through group presentations, permit students from other groups to ask
questions on the theories and explanation offered by each presenting group. Invite students to
“grade” the quality and delivery of the presentations, including the question and answer
sessions.
3. Even the Great Depression could not derail entrepreneurship in the U.S. Ask students to explain
why the Great Depression era would be one of the most technologically progressive eras in U.S.
history. After viewing In Pictures: 10 Entrepreneurs Who Rose from the Ashes, ask students to
identify how some of the activities of a few entrepreneurs of this period impact us today.
4. Discuss how an economic bust can impact government receipts. How does this impact the
balance of government expenditures against receipts if expenditures are held constant? Relax
this assumption and explain that government expenditures tend to rise during a contraction,
thus pushing the government further into deficit spending.
Websites and Additional Resources
 Lindner, Melanie and Mintz, Anne. “Entrepreneurs who Rose from the Ashes.” Forbes.com.
Retrieved December 10, 2009 from: http://www.forbes.com/2008/11/10/recessiondepression-entrepreneurs-ent-manage-cx_ml_1110upfromashes_slide.html
 Parker, Randall. "An Overview of the Great Depression." EH.Net Encyclopedia, ed. Robert
Whaples. 2008. Economic History Services. Retrieved December 10, 2009 from:
http://eh.net/encyclopedia/article/parker.depression
 Smiley, Gene. "Great Depression." The Concise Encyclopedia of Economics. 2008. Library of
Economics and Liberty. Retrieved December 11, 2009 from:
http://www.econlib.org/library/Enc/GreatDepression.html
 Steindl, Frank. "Economic Recovery in the Great Depression." EH.Net Encyclopedia, ed. Robert
Whaples. 2008. Retrieved December 10, 2009 from:
http://eh.net/encyclopedia/article/Steindl.GD.Recovery