Economic Policies and the Gold Standard

In the early 1930s, England abandoned the gold standard, devaluing the pound to focus on domestic recovery, which had significant global financial repercussions. In response, President Hoover maintained the US's commitment to the gold standard, implementing measures to stabilize the dollar and prevent a gold drain. However, this led to economic challenges, including a decline in US exports and deepening the Great Depression. The political landscape shifted as Franklin D. Roosevelt criticized Hoover's policies, advocating for a focus on domestic economic stability over international financial concerns, ultimately leading to the US abandoning the gold standard under Roosevelt's leadership.

What significant action did the British government take that broke with tradition?

• Declared war

• Signed a new trade agreement

• Increased taxes

• Abandoned the gold standard

What was the immediate financial impact on European banks holding pounds after Britain devalued its currency?

• They gained millions

• They remained unaffected

• They received government bailouts

• They lost millions

How did President Hoover respond to the financial crisis in Europe?

• By proclaiming America's steadfastness to the gold standard

• By raising taxes

• By abandoning the gold standard

• By devaluing the dollar

What measure did the Federal Reserve take to maintain confidence in the dollar?

• Lowered interest rates

• Closed banks temporarily

• Raised its discount rate

• Printed more money

What was one of the serious ramifications of Britain's devaluation for the United States?

• Increased foreign investments

• Higher employment rates

• A drop in the price of agricultural exports

• Increased exports to Britain

What was the impact on American manufacturing plants due to the loss in exports?

• They received government subsidies

• They increased production

• They closed down

• They expanded operations

What was the Hoover administration's stance on the gold standard?

• They wanted to replace it with silver

• They wanted to abandon it

• They staunchly defended it

• They were indifferent

What was Franklin D. Roosevelt's position on Hoover's economic policies during the 1932 presidential race?

• He supported them

• He wanted to continue them

• He questioned their wisdom

• He had no opinion

What did Roosevelt pledge in his inaugural address regarding the economy?

• To maintain international financial stability

• To establish a sound domestic economy

• To increase international trade

• To reduce taxes

What significant action did Roosevelt take within six weeks of his pledge?

• He declared a state of emergency

• He signed a new trade agreement

• He abandoned the gold standard

• He increased taxes