Chapter 14 Section 1 Notes

1. Chapter 14 Section 1 Notes • The Great Depression • Key industries (Railroads etc…) Barely made profits • Farmers making more than they could sell • Railroads lost business to other forms of transportation • New forms of energy hit coal mining

2. Chapter 14 Section 1 • Demand for crops after WW1 went down • Farmers had to buy expensive machinery • Late 1920’s Americans bought less • Started using credit and living beyond their means • Bought more than they could afford • After debts piled up, quit spending

3. Chapter 14 Section 1 • Late 1920’s rich got richer and poor got poorer • More than 70% making less than $2500/ year – Amount considered for decent standard of living • Prosperity relied on rich people • 1928 Hoover elected because Americans wanted Republican due to perception of 20’s being so prosperous.

4. Chapter 14 Section 1 • Rich people invested in stock market. • Stock Market crashed • Black Tuesday – Oct. 29 1929 • 16.4 million shares dumped • By mid November Americans had lost $30 million = spendings on World War 1 • Signaled beginning of Great Depression

5. Chapter 14 Section 1 • People could not get money from banks because it was in stock markets. • Millions lost their savings because government did not insure banks. • By 1933, 11,000 of 25,000 banks had closed. • Approximately 90,000 businesses went bankrupt • 25% unemployment in 1933

6. Chapter 14 Section 1 • European countries suffered due to WW1 costs • Americans could buy less so harder for Europeans to get out of debt • Causes of Depression – 1.) Tarriffs cut down foreign market for American goods. • 2.) Crisis in farm sector 3.) Availability of easy credit. 4.) Unequal distribution of income (Rich got richer, and poor got poorer)

7. 1.) During the Great Depression the key industries. a.) Barely made profits b.) Were making a lot of money as the rich got richer c.) Profits stayed solid 2.) Describe agricultural production during the Great Depresssion? a.) Farmers were making less than they could sell b.) Farmers did not have the tools needed to keep up with demand c.) Farmers were making more than they could sell 3.) Name one reason why railroads were losing business? a.) They limited their services to meet budget needs b.) They had not built enough tracks to service the peoples demands c.) There were other forms of transportation available 4.) What happened to the demand for crops after WW 1? a.) It went up b.) It stayed the same c.) It went down 5.) Name one reason farmers were in debt. a.) They had to buy expensive houses b.) They had too many utility bills, such as electricity, to pay c.) They had to buy expensive machinery 6.) Name a new way in which consumers were purchasing goods? a.) Cash b.) Writing checks c.) Credit 7.) What happened to a lot of people who were using credit to buy goods? a.) They became very rich b.) They were able to purchase fewer items c.) They piled up huge debts 8.) What happened to the rich in the 1920’s? a.) They got richer b.) The rich was unaffected c.) They got poorer 9.) What happened to the poor in the 1920’s? a.) They got richer b.) They got poorer c.) The poor was unaffected 10.) What percentage of Americans were making less money than what was considered to be able to provide a decent standard of living? a.) 25% b.) 75% c.) 100% 11.) What happened to people after they piled up debt using credit? a.) They stopped spending b.) They were unaffected c.) They continued to spend 12.) What happened to the economy when people stopped spending? a.) It started doing better b.) It started to crash c.) It stayed the same Chapter 14 Section 1 Quiz