Ch 14.1, The Nation’s Sick Economy: Causes of the Great Depression
The Great Depression happened as a result of a perfect storm of financial problems. Use pages 464-471 to answer the following
questions and get an idea of what happened.
1.
2.
3.
4.
5.
6.
Industries in Trouble: Explain what happened in the following industries in the 1920s: a. railroads, b. coal mining, c.
housing starts
Farmers Need a Lift: Explain why farmers took out loans and then couldn’t pay them.
Uneven Distribution of Income: While the richest Americans saw their incomes grow by 75%...the average man or woman
bought a new outfit of clothes only ______ a year.
Dreams of Riches in the Stock Market: Prices in the stock market were rising everyday in the mid to late 1920s. This
happened, in part, because of speculation and buying on margin. Explain how these two concepts would contribute to
higher stock prices (think about what causes stock prices to change).
Black Tuesday: On Oct 29, 1929, stock prices in the market fell drastically. Investors lost confidence in the economy and
tried selling the stocks they owned. How much money had investors lost by mid-November?
Bank and Business Failures: “By 1933, _________ of the nation’s 25,000 banks had failed.” A. What did this mean for
Americans and businesses? B. Explain the following flow chart:
Bank failures
7.
Decrease in business production
Unemployment
More bank failures
Worldwide Shock Waves: The Hawley –Smoot Tariff Act tried to protect American companies from foreign companies
(think what would happen with American cars if the government didn’t allow Japanese carmakers to operate in the US). In
return, foreign countries set their own tariffs, destroying international trade. Give two reasons why you think international
trade is important to the US economy?
Ch 14.1, The Nation’s Sick Economy: Causes of the Great Depression
The Great Depression happened as a result of a perfect storm of financial problems. Use pages 464-471 to answer the following
questions and get an idea of what happened.
1.
2.
3.
4.
5.
6.
Industries in Trouble: Explain what happened in the following industries in the 1920s: a. railroads, b. coal mining, c.
housing starts
Farmers Need a Lift: Explain why farmers took out loans and then couldn’t pay them.
Uneven Distribution of Income: While the richest Americans saw their incomes grow by 75%...the average man or woman
bought a new outfit of clothes only ______ a year.
Dreams of Riches in the Stock Market: Prices in the stock market were rising everyday in the mid to late 1920s. This
happened, in part, because of speculation and buying on margin. Explain how these two concepts would contribute to
higher stock prices (think about what causes stock prices to change).
Black Tuesday: On Oct 29, 1929, stock prices in the market fell drastically. Investors lost confidence in the economy and
tried selling the stocks they owned. How much money had investors lost by mid-November?
Bank and Business Failures: “By 1933, _________ of the nation’s 25,000 banks had failed.” A. What did this mean for
Americans and businesses? B. Explain the following flow chart:
Bank failures
7.
Decrease in business production
Unemployment
More bank failures
Worldwide Shock Waves: The Hawley –Smoot Tariff Act tried to protect American companies from foreign companies
(think what would happen with American cars if the government didn’t allow Japanese carmakers to operate in the US). In
return, foreign countries set their own tariffs, destroying international trade. Give two reasons why you think international
trade is important to the US economy?