The Great Depression

Which of the following was not a cause of the Great Depression?

• Excessive American loans to European countries

• Uneven distribution of wealth

• Installment buying

• Purchasing of stocks "on margin"

Answer explanation

The Great Depression was caused by a combination of factors, including the stock market crash of 1929, the failure of banks, overproduction of goods, and the unequal distribution of wealth.

Settlements of shacks found on the outskirts of many Amercian cities beginning in the early 1930's

Answer explanation

The shacks found on the outskirts of many American cities beginning in the early 1930's were part of a phenomenon known as "Hoovervilles." Named after President Herbert Hoover, who was in office during the Great Depression, Hoovervilles were makeshift settlements of shacks and tents built by homeless people who had been displaced by the economic crisis. The shacks were often made of scrap wood, cardboard, and other materials, and were often located near rivers, railroad tracks, and other areas where people could find shelter. The Hoovervilles were a stark reminder of the poverty and desperation of the Great Depression, and were a symbol of the failure of the government to provide adequate relief to those affected by the economic crisis.

What was the initial cause of the Great Depression, as indicated by the Dow Jones Industrial Average?

• The stock market crash of 1929

• The failure of banks

• The Dust Bowl and agricultural depression

• The increase in protective tariffs

Answer explanation

The initial cause of the Great Depression, as indicated by the Dow Jones Industrial Average, was a sharp decline in stock prices that began in late October 1929. This decline was caused by a combination of factors, including over-speculation in the stock market, a contraction in the money supply, and a decrease in consumer spending. The Dow Jones Industrial Average, which tracks the performance of 30 large industrial companies, fell from a peak of 381.17 on September 3, 1929 to a low of 41.22 on July 8, 1932. This represented a decline of nearly 89%.

Name given in the 1930's to regions of Oklahoma, Kansas, etc. where severe drought and poor farming practices caused massive dust storms.

Answer explanation

The Dust Bowl was a period of severe dust storms that occurred in the 1930s in the Great Plains region of the United States, primarily in the states of Oklahoma, Kansas, Colorado, New Mexico, and Texas. The Dust Bowl was caused by a combination of drought, over-farming, and poor farming practices. The drought caused the topsoil to become dry and loose, and the wind blew the topsoil away in massive dust storms. These dust storms caused extensive damage to crops, livestock, and people, leading to the displacement of thousands of people.

1930 Tariff Act that imposed severe tariffs on all incoming goods; European countries responded with their own high tariffs.

Answer explanation

The Hawley-Smoot Tariff was a protectionist measure taken by the United States to protect its domestic industries from foreign competition. It imposed high tariffs on all incoming goods, making it more expensive for foreign companies to sell their products in the US. This had a negative effect on international trade, as European countries responded by imposing their own high tariffs on US imports. This led to a decrease in international trade and a decrease in economic growth in both the US and Europe.

Which TWO answers best describe President Herbert Hoover's presidency during the Great Depression?

• A very hands-on government

• Mostly hands-off government

• Largely unable to better economic conditions

• Created many New Deal programs

Answer explanation

President Herbert Hoover's presidency during the Great Depression was marked by a lack of government intervention in the economy. Hoover believed that the government should not interfere with the free market and instead relied on voluntary cooperation between businesses and individuals to help the economy recover.

Which statements describe the Federal Deposit Insurance Corporation (FDIC)?

Select TWO correct answers.

• It was created as a result of World War I.

• One of its purposes was to maintain financial stability.

• It was created as a result of Prohibition.

• One of its purposes was to increase trade with foreign nations.

• It was created as a result of the Great Depression.

Answer explanation

The Federal Deposit Insurance Corporation (FDIC) is a United States government agency that was established in 1933 in response to the banking crisis of the Great Depression. The FDIC provides deposit insurance to protect depositors in case their bank fails or becomes insolvent.

The policies passed in response to the Great Depression contributed to a change in which of the following earlier popular beliefs?

• Big business should have significant influence over federal legislation.

• Labor unions should have the sole power to negotiate with corporations.

• Government should be noninterventionist during economic downturns.

• Federal programs should contribute to the welfare of older Americans.

Answer explanation

Throughout the nineteenth century, it was generally the policy of the federal government, regardless of political party, to avoid directly intervening in the functioning of the economy. While some groups, such as farmers and workers, questioned this policy during times of economic downturn, for example during the Panic of 1873, the public generally supported the idea of federal nonintervention. However, the severity of the Great Depression during the 1930s resulted in the passage of New Deal policies that attempted to stimulate the economy and provide federal relief for the many Americans suffering economic hardship; in turn, the public became increasingly supportive of the idea of direct governmental influence.

What caused the stock market crash of 1929?

• prices increased and investors purchased more stock

• People panicked and quickly sold their stocks

• farmers could not produce enough food for the USA

• World War I caused the economy to fall

Which describes a "depression"?

• poor economic performance and high unemployment

• high economic performance

• low unemployment and low prices

• growth in the economy