Flashcards
Chapter 30 - Great Depression
Cards in this deck (17)
- 1OverproductionA situation in which more goods are being produced than people can afford to buy.
- 2UnderconsumptionA situation in which people are purchasing fewer goods than the economy is producing.
- 3What happened because of underconsumption?Since consumption of farm products decreased, caused prices to drop. Caused farms to go further into debt. # of farms & farmers began to decline, unemployment went up and companies were declared bankrupt.
- 4Stock market crashIn October 1929, the period of plunging stock market prices that helped initiate the Great Depression. Not only cause, but did lead: unemployment, banks closing, people losing money regardless if they were in stocks or not.
- 5Black TuesdayOctober 29, 1929; the worst day of plunging stock market prices during the stock market crash that helped initiate the Great Depression.
Good times were over, Stocks lost their value. This was due to many people wanted to sell their shares but very few wanted to buy.
- 6bull marketA period in which stock prices are steadily rising
- 7The Bull Market resulted from?Businesses thrived in the 1920's and Americans saw this. In the late 1920's a lot of people were swept into the speculative enthusiasm for the stock market.
- 8brokera person who buys and sells stocks for clients
- 9Buying on marginBuying stock by paying a percentage of a stock's price and borrowing the rest of the money from a broker, allowing one to make greater profits if the stock does well.
- 10bear marketa period in which stock prices are steadily decreasing
- 11bank runa financial crisis in which a large number of customers simultaneously attempt to withdraw their money from a bank out of fear that the bank will close
- 12What led to bank runs?Stock Market crash like Black Tuesday hurt banks. Too many people, loaners/brokers were caught in the fever as well as banks. Many investors could not pay brokers for borrowed money. In turn brokers could not pay banks for the borrowed loans. Basically the faltering economy.
- 13Federal Reserve SystemThe central banking authority of the United States, which manages the nation's money supply.
- 14What did people think of the Federal Reserve System?People believed they further weakened the economy by driving interest rates higher, depriving businesses of the capital they needed to survive. This declined helped turn a nasty recession into an economic calamity.
- 15discount ratethe rate of interest at which banks that belong to the Federal Reserve System can borrow money from Federal Reserve banks
- 16Hawley-Smoot Tariff ActA law passed by Congress in 1930 to raise the tariffs on imported goods in order to protect U.S. businesses and farmers.
- 17Consequences from the Hawley-Smoot Tariff Act?Economists blamed Congress for this act, for further hurting the economy. The record-high tariffs on both sides of the Atlantic stifled international trade. Gradually, the Great Depression spread around the globe.
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- High School Diploma History (Chapter 30: The Great Depression) Flashcards on Chapter 30 - Great Depression, created by Michelle M on 07/03/2016.
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- Michelle M
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