Presentation on theme: "The Economy in the Late 1920’s"— Presentation transcript:
1The Economy in the Late 1920’s Crash & DepressionSection 1The Economy in the Late 1920’sDuring the 1920’s, rising wealth and a booming stock market gave Americans a false sense of faith in the economy.
2The Economy Appears Healthy When Hoover became President 1928, everyone expected the economy to remain strong.
3Economic Danger SignsUneven Prosperity—the rich got richer.2. Buying on Credit—people bought products whether they could afford them or not.
4Playing the Stockmarket—speculation—the practice of making high-risk investments Buying on margin—buying stock on credit.4. Too Many Goods, Too Little Demand—overproduction caused some industries to slow in the 1920’s.
11The collapse of the stock market is known as the Great Crash. Business cycle—periods in which the economy grows, then contracts.Brokers and banks called in their loans, but people did not have cash to pay them.
12The Crash Affects Millions Great Depression—a severe economic decline that lasted from 1929 until the U.S. entered WWII.Gross National Product—(GNP) the total value of goods and services a country produces annually.
13Banks Close—Thousands of banks closed their doors when they could not return their depositors’ money.2. Impact on the World—When the U.S. economy fell, the global economic system began to crumble.
15Causes of the Depression 1. Overspeculation2. Government policies3. An unstable economy
16Social Effects of the Depression Section 3Social Effects of the DepressionMost people were not immediately affected by the 1929 crash. But by the early 1930’s, wage cuts and unemployment brought widespread suffering.
191. Hoovervilles—The hardest hit were those at the bottom of the economic ladder. Homeless people sometimes built shanty towns, with shacks of tar paper, cardboard, or tin. They were called Hoovervilles.