(1) What does this mean? (2) How does this explain Keynesian Economics? C + I + G = GDP

Consumption Investment Government Spending C + I + G = GDP

Economic Theories What is “Supply Side Economics?” – Versus What is “Keynesian Economics?” What does the “failure of aggregate demand” mean? Calvin Coolidge John Maynard Keynes

** Supply-side Economics ** If taxes were lower, businesses and consumers would have more $$$$ and spend & invest more in the economy, causing the economy to grow ** Keynesian Economics – Keynes’s solution: Government should massively increase its own spending in the short-term, even if it meant runing a significant budget deficit ** What does a failure of aggregate demand mean? – In simple terms, “private businesses were not hiring and consumers were not buying products.”

1. __________ was an important act passed for the purpose of stabilizing the banking industry, as it called for a four-day bank holiday, federal inspection of the banks, and then the Treasury Department would issue a license to those banks allowed to remain open. A. Emergency Banking Relief Act B. Securities Act of 1933 C. Glass-Steagall Act D. National Industrial Recovery Act (NIRA) Pop Quiz

2. Passed to give workers federal government protection for forming a union, the ___________ was passed in response to the Supreme Court declaring unconstitutional the (NIRA) National Industrial Recovery Act. A. Wagner Act B. Keynesian Act C. Social Security Act D. Works Progress Administration Pop Quiz

3. Possibly the New Deal act that had the most immediate impact upon the Black Hills during the Great Depression, the _________ hired unemployed men, mostly 18 to 25 year-olds to work in camps in forests all around the United States, building roads, developing parks, building trails and water reservoirs, as well as billions of trees across the Great Plains to prevent another Dust Bowl. A. Works Progress Administration B. Farm Security Administration C. Civilian Conservation Corp D. Farm Credit Administration Pop Quiz

4. This important piece of legislation, called the _________, attempted to help the agricultural industry adjust to the difficult economic situation of the Great Depression in part caused by too much supply of agricultural products leading to the slaughtering of millions of cows and plowing under millions of acres of crops. A. Farm Credit Administration B. Agricultural Adjustment Act C. Farm Security Administration D. Wagner Act Pop Quiz

5. The Social Security Act of 1935 established all of the following except, meaning that _________________ is not one of the provisions of this act. A. Supplemental retirement for those at 65 years of age (now eligible at ages 62, 65, and 68) B. Payroll contributions to Social Security in the form of a payroll tax that would only be paid by the wealthiest Americans C. Unemployment insurance to those temporarily unemployed D. Modest welfare payments to the needy, disabled, and poor mothers w/ dependent children Pop Quiz

Check on Learning (1) All of the following except _____ were provisions of the Treaty of Versailles that led to rising fascism and eventually World War II. – A. $33 billion war debt – B. Article 231 “war guilt” clause – C. Creation of new nations of Czechoslovakia and Poland – D. Creation of mandate system in the Middle East – E. Germany forced to de-militarize and give up overseas colonies

Causes that Supported Failure of “Weimar Republic ( )” and Rise of Hitler (1) For Germany, resentment over the Treaty of Versailles (2) Economic Instability (3) Fears regarding communism

Check on Learning (2) Hyperinflation can best be understood as _____. – A. A decrease in the value of paper money – B. Out of control inflation – C. A decrease in the price of goods – D. The opposite of inflation, where the economy magically gets better

Economic Instability The Weimar Republic has a difficult time paying the war loan, so it prints more money, too much money. The German “Mark” and the Dollar, 1914 – 1923 DateExchange rate, $1 = ___ Marks – July, marks – January, – January, – July, – January, – January, ,972.0 – August, ,620,455.0 – September, ,860,000.0 – November, ,200,000,000,000.0 marks

Hyperinflation

Causes that Supported Failure of “Weimar Republic ( )” and Rise of Hitler (1) For Germany, resentment over the Treaty of Versailles (2) Economic Instability (3) Fears regarding communism

U. S. Foreign Policy and German Economy Dawes Plan (1924) – U.S. loans to Germany allow it to pay reparations to Allied Countries German Economic Recovery, Germany profoundly affected by Stock Market Crash of 1929 Calvin Coolidge,

Check on Learning (3) Concisely, how did the Stock Market Crash of 1929 affect Germany?

Check on Learning (4) What effects did the Reichstag fire have upon German society?

How does Hitler become Dictator of Germany? Problem #4 - Rise of International communism January of 1933, Hitler is named Chancellor Feb. 27, 1933, burning of the Reichstag, legislative building Enabling Act of 1933, Hitler becomes dictator “From each according to his ability, to each according to his need” – Karl Marx, Communist Manifesto

Check on Learning (5) The Enabling Act of 1933 led to _____. – A. Communists being blamed for the Reichstag fire – B. Reduced individual freedoms, such as freedom of speech, the right to peaceably assemble, and freedom of public expression – C. Less political control held by the communists during the era of the Weimar Republic in Germany – D. Increased political control held by the Nazi Party (German National Socialist Workers’ Party)

How does Hitler become Dictator of Germany? Problem #4 - Rise of International communism January of 1933, Hitler is named Chancellor Feb. 27, 1933, burning of the Reichstag, legislative building Enabling Act of 1933, Hitler becomes dictator “From each according to his ability, to each according to his need” – Karl Marx, Communist Manifesto

Check on Learning (6) The countries of France, Great Britain, and Germany responded to the Great Depression by ______________. * A. Decreasing government spending and encouraging businesses to hire more people * B. Keynesian economics, thereby the government engaging in deficit-spending to help grow the economy * C. Hesitancy to increase government spending and doing nothing or “laissez-faire” economics * D. All becoming fascist countries

Economic Problems In Europe and Political Responses By 1932, European trade fell to 1/3 of 1929 levels U.S.S.R., fairly isolated from global economic problems and Five-Year Plans … France not connected to U.S. trade, but suffered drops in tourism … Great Britain engages in infrastructure improvements …

Check on Learning (7) The response of President Herbert Hoover ( ) to the Great Depression can best be understood as _____. – A. A purely Keynesian economic approach – B. Resistance to involving businesses leaders in helping to solve the economic problems of this era, as he distrusted big business – C. Hesitancy to increase government spending, as he believed that depressions were a normal part of the business cycle and government should stay out of the economy – D. He considered making the U.S. a communist country

Hoover Responds to the Great Depression Conventional economic thought … Hoover Dam (1931 – ‘36) benefits … – Water supply – Hydro-electric power – Flood control Reconstruction Finance Corporation (1932) … – $2 Billion to banks, companies, railroads, etc. Emergency Relief Act (1932) … – $$$ to states for public works projects

Hoover Responds to the Great Depression By 1932, unemployment is at 24% … Bonus Army (1932) … – 40,000 war veterans want their promised bonus – U.S. Army evicts veterans from Washington D.C.

Check on Learning (8) The old faith of self-reliance pervasive during much of U.S. History and at the beginning of the 1930’s can best be understood as ______. – A. Neighbors should band together to help each other – B. Rugged individualism, in that if you’re unsuccessful, it’s your fault – C. Settling in communes, small, self-sufficient communities, is the way to solve all economic problems

– The old faith of self-reliance … – National government in 1930 … – (9) Percentage of mortgages in default by 1930 was at ________. Check on Learning

– (10) To the country of ________, 100,000 Americans left our country during the 1930’s in search of a better life. Check on Learning

Write down the following prompts / questions in notebooks, leaving two lines between preparing for a video clip about “Stormy Weather”: (11) There were four million unemployed in 1930, but in 1933 there were _______ million people unemployed.

Station One “Migrant Mother” (12) Who were the “Dust Bowl refugees?”

Station One “Migrant Mother” (13) What is a tenant farmer?

Living During the Great Depression Farms lost through foreclosure … Tenant vs. Sharecroppers … Percentage of tenant / sharecropping farmers … Why? Bank foreclosures and bank activities … California migration …