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The Stock Market Crash,
the Great Depression,
and the New Deal
What was the Great
Depression?
• Period of severe economic
hardship that lasted from
1929 to World War II
What were three causes of
the Great Depression?
• Overspeculation in stocks
• Collapse of the banking
system
• Hawley-Smoot Tariff
What is speculation?
• Buying something at a
low price in the hope of
selling it later at a profit
What is the largest
stock market in the
United States?
• The New York Stock
Exchange
What does it mean to
buy stock on margin?
•Buy stock on credit
What event triggered the
Great Depression?
•The Stock Market
Crash
What functions as the
central bank of the
United States?
• The Federal Reserve
System
What acts as a banker’s
bank?
• The Federal Reserve
What controls the
nation’s money supply?
• The Federal Reserve
What is inflation?
• When prices increase
and the dollar buys
less
What does the Federal
Reserve do to stop
inflation?
•Raises interest rates
The Federal Reserve’s
power to set ________
______ enables it to control
the nation’s money supply?
• Interest rates
What does the Federal
Reserve do if it believes the
economy is overheating
and causing inflation?
• Raises interest rates
What does the Federal
Reserve do if it believes
the economy is slowing
down?
• Lowers interest rates
What is a protective
tariff?
• A tax on imports that is so
high that Americans
cannot afford to buy
foreign goods
What was the HawleySmoot Tariff?
• Protective tariff
• The highest tariff rates
in history
The Hawley-Smoot Tariff
was supposed to help
American business. Why
did this tariff law hurt the
American economy?
• Foreign countries retaliated by
passing high tariffs of their own.
• This meant foreigners could no
longer afford to buy Americanmade goods.
• The decrease in foreign sales
was greater than the increase in
the sale of American-made
goods within the United States.
What were five effects of
the Great Depression on
the United States?
• Unemployment increased
• Banks closed
• Consumer demand for
goods dropped
• Political unrest increased
• Farm foreclosures increased
What was the
unemployment rate among
Americans by 1932?
• 25%
Who was president when
the Great Depression
began?
• Herbert Hoover
What was Herbert
Hoover’s political party?
• Republican
What president started the
New Deal?
• Franklin D. Roosevelt
What was Franklin
Roosevelt’s
political party?
• Democrat
What was President
Franklin Roosevelt’s
program to end the Great
Depression?
• The New Deal
Who said, “The only thing
we have to fear is fear
itself?”
• Franklin D. Roosevelt
What the three R’s of
the New Deal?
• Relief
• Recovery
• Reform
What is reform?
• Change for the better
What was the purpose of
the New Deal “relief”
programs?
• Ease the suffering of the
unemployed
Give an example of a New
Deal “relief” program.
• WPA
What did WPA do?
• Paid people to work on
public works projects
What are public works
projects?
• Construction projects paid
for by the government
• Benefit everyone
Give examples of public
works projects.
• Roads
• Schools
• Bridges
• Post offices
• Parks
• Libraries
• Dams
What was the purpose of
the New Deal “recovery”
programs?
• Help Business Recover
Give an example of a New
Deal “recovery” program.
• AAA
For what did AAA stand?
• Agricultural Adjustment
Administration
What did AAA do?
• Paid farmers not to raise
crops and livestock
• By limiting supply, tried to
raise livestock and crop
prices
What was the purpose of
New Deal “reform”
programs?
• Bring about change for
the better in American
society
Give two examples of New
Deal “reform” programs.
• FDIC
• Social Security
For what does FDIC stand?
• Federal Deposit Insurance
Corporation
What does FDIC do?
• Deposits at FDIC-insured
banks are now insured up
to at least $250,000 per
depositor through
December 31, 2013
What did the Social
Security Act provide?
• Unemployment insurance
• Old-age pensions
What brought an end to the
Great Depression?
• World War II
What is another name for
organized labor?
• Unions
Were labor unions active
during the Great
Depression?
•Yes
What three rights did
workers gain during the
New Deal?
• Right to form a Union
• Right to Strike
• Minimum Wage
Since the New Deal, who do
Americans hold responsible
for bringing prosperity to the
U.S. economy?
• The federal government,
especially the President