Chapter 22 section 1 and 2 questions

Directions: Pages numbers to help you find answer for chapter 22 section 1 & 2 Ch. 22 section 1 #1-2 page 631 #3-4 page 632 #5 Uneven Prosperity page 632-633 Buying on Credit page 633 Too Many Goods, Too Little Demand page 633 Trouble for Farmers page 634 Ch. 22 section 2 #1-3 page 635 #4 page 636 #5 page 636-637 #6-7 page 637 #8 page 638

Chapter 22 Section 1: The Economy in the late 1920s

1. What did people expect would happen to America after Republican Herbert Hoover was elected as president in 1928? Good times would continue and even get better under Hoover

2. What happened to the stock market in America during the 1920s? Market soared until early Oct. 1929

3. How did workers pay and benefits change since 1914? Workers pay rose by more than 40% since 1914 Benefits were provided by employers (paid vacations, health plans and even English class for immigrants)

4. Why did Americans have so much confidence in the economy in the 1920s? Had faith in business, which seemed to be thriving

Uneven Prosperity Huge corporations and rich families still held most of the nations wealth 71% of individuals and families earned less than $2500 a year 80% of families had no savings

Buying on Credit Personal debt increased as people often borrowed money to buy products they could not afford Installment plans made expensive items irresistible Speculation-people practiced making high risk investments to get a high gain Buying on margin-purchase stocks for only a faction of price 10-50% and borrow rest

Too Many Goods, Too Little Demand Nations warehouses filled up with surplus goods Wages risen but American consumers could not afford to buy goods as fast as factories produced them

Trouble for Farmers Farmers began to borrow money to purchase new machinery in the 1920s Farm prices began to drop and farmers could not repay loans Lots of banks in rural areas went out of business

Chapter 22 Section 2: The Stock Market Crash

1.What happened to the stock market in September 1929? Dow Jones Industrial Average reached all time highs

2. What happened to the stock market during the beginning of 1929? Stock prices continued to climb

3. What happened to the stock market on Black Thursday? Not trusting Hoover investors around the country rushed to get money out of stock market which led to stock price to drop rapidly

4. What happened to the stock market on Black Tuesday 4. What happened to the stock market on Black Tuesday? (October 29, 1929) Investors worried about money raced to get their money out of the stock market and records 16.4 million shares were sold compared to 4 and 8 million shares a day Collapse known as Great Crash

5. How did the stock market crash affect workers and farmers? Workers: American Factories closed-1000s people lost jobs or had cut in pay; Restaurants closed & people could not afford to eat at them Farmers: Farm prices continued to fall which led to farmers losing farms

6. How did the stock market crash affect banks? People with loans to repay and nervous depositors rushed to withdraw their money Banks closed when they could not give people their moeny

7. How did the stock market crash affect the world? Countries could not repay WWI debt = Allies could not repay America and Europeans no longer could afford to buy American made goods

8. Name 3 real underlying causes of the Great Depression Overspeculation: Speculation bought stocks with borrowed money, then pledge those stocks as collateral to buy more stocks Gov’t Policies: monetary polices to blame Unstable Economy: nations wealth was unevenly distributed with most money in hands of few families who tended to save rather than buy goods