1. Chapter 25
The Great Depression

2. Describe why buying on margin was risky
Describe why buying on margin was risky. What is similar to buying on margin today?
Buying on Margin was risky because you were buying stock without having the money to purchase the stock. If the stocks dropped you would be bankrupt.
Today it is like using credit cards.

3. List 2 things that caused banks to close in 1929?
Banks had invested in the Stock Market
The banks lost money giving loans to people to be able to buy on margin.
The banks did not have enough money to cover customer accounts.

4. How did some people lose their life savings? Could this happen today?
People lost their life savings because they had put their money in the bank but the bank did not have the money to pay out to them if they wanted it. It should not happen today if the bank is FDIC, insured by the Federal Government

5. List 5 causes of the Great Depression, then explain how each was a cause
Over Production of goods. This caused a drop in prices, people lost their jobs.
Uneven distribution of wealth, most people did not have enough money to continue to buy goods.

6. List 5 causes of the Great Depression, then explain how each was a cause
3. Declining world trade, Europeans could not afford goods because they had been devastated by WWI
4. High Tariffs- Europeans businesses could not sell goods in the US as a result they did not have money to spend.

7. List 5 causes of the Great Depression, then explain how each was a cause
5. Monetary Policy- Taxes and high interest rates forced people to not spend money causing deflation or a hoarding of money.

8. How did President Hoover respond to the Depression? What was his belief?
Hoover did not do much in terms of Government programs. He felt businesses and individuals should help by hiring and promoting business. He did create the RFC that helped businesses but he avoided helping individuals.

9. Why did people choose Roosevelt over Hoover in the election of 1932?
People chose Roosevelt because he promised to help individuals right away. Hoover was blamed for the economic problems and his reluctance to help individuals.

10. Describe how Roosevelt believed that the economy should be “fixed”, Who, How?
Roosevelt felt the government should directly help the people by creating jobs and setting up social programs. This was called the “New Deal”

11. Describe how Roosevelt built back trust in banks?
Roosevelt built trust in banks by closing (Emergency banking act) them all for a period of time and only re-opening those banks that were “healthy”. They created the FDIC which insured a person’s money in the bank.

12. List 3 New Deal Programs that employed people to build public projects, also describe what they did.
The Civil Works Administration (CWA)- employed more than 4 million Americans, building roads and airports.

13. List 3 New Deal Programs that employed people to build public projects, also describe what they did.
The Civilian Conservation Corps. (CCC)- provided jobs for hundreds of thousands of people through projects such as planting trees and improving national parks.

14. List 3 New Deal Programs that employed people to build public projects, also describe what they did.
The Tennessee Valley Authority (TVA)- hired people to build dams and generators, bringing electricity and jobs

15. List 2 new Deal programs that helped farmers, describe how they helped.
Farm Credit Administration (FCA) helped farmers refinance their mortgages and save their farms.

16. The Agricultural Adjustment Act (AAA)
List 2 new Deal programs that helped farmers, describe how they helped.
The Agricultural Adjustment Act (AAA)
Helped stabilize agricultural prices.

17. List two criticisms of the new deal and give a specific example of a group or person for each criticism
Those who felt the New Deal went too far criticized the enormous expansion of the Federal Government. The high cost of new government programs would lead to new taxes and give the government too much power like American Liberty League.

18. List two criticisms of the new deal and give a specific example of a group or person for each criticism
Then there were those who thought the New Deal did not go far enough like Francis Townsend. Some wanted to tax the wealthy to help the poorest citizens.

19. What New Deal act expired in 1934. What act replaced it
What New Deal act expired in 1934? What act replaced it? What did these two laws do?
The CWA expired in 1934 and was replaced by the Works Progress Administration. They both put people to

20. Describe what led Farmers to lose their land?
A severe drought caused farmers to lose their land. They could not pay their mortgages and lost their farms

21. What effect did the Great Depression have on families?
The Great Depression put a great deal of stress on families. Many could not pay their bills and lost their home. Children quit school to work. They had to live in “Hoovervilles.” Discrimination worsened for minority groups. Many moved to California to find jobs, but in many situations there were no jobs available.

22. Describe how the WPA helped the Arts
The WPA helped the arts because they created music, sculptures, paintings, movies, and literature that reflected the difficulty of the times. They also gave work to all kinds of people.

23. What New Deal Programs still exist today?
New Deal Programs still in existence today are FDIC and Social Security.