ESSENTIAL QUESTION
• What happens during an economic depression?
UNEMPLOYMENT RATE
• Number of people who can’t find work.• 25% during Great Depression (1930’s).• 5% during a healthy economy.
BANK FAILURES
• Unable to meet withdrawal demands.• People may lose their savings.
BANKRUPTCY
• People or businesses or unable to pay debts.
FORECLOSURES
• People lose property, unable to pay mortgages.
OVERPRODUCTION
• Businesses make products nobody wants.
STAGNANT WAGES
• Pay does not keep up with expenses.
ESSENTIAL QUESTION
• What caused the Great Depression?
MARGIN
• People could borrow money to buy stock.
EASY CREDIT
• Loaning money to those who may not be able to pay it back.
NEW YORK STOCK EXCHANGE
• Place to buy and sell STOCK.• Part ownership in a company.
SPECULATION
• Hope to buy low and sell high.
DOW JONES
• Used to measure the stock market.
BLACK TUESDAY
• When most stocks became worthless.
MARGIN CALL
• Forcing people to pay loans back.• After Black Tuesday, most could not, forced to
declare bankruptcy.
ESSENTIAL QUESTION
• How did the Great Depression affect America?
SHANYTOWNS
• Communities of homeless.• No electricity, no heat, no water.
HOOVERVILLES
• Nickname for the shantytowns.• Named after the President.
HOBOS
• Single men traveling to find work, food, shelter.
• Often known to ride rails from city to city.
SOUP KITCHENS
• Places that gave free food to homeless.• Example: Salvation Army.
ESSENTIAL QUESTION
• What was Republican President Hoover’s reaction to the Great Depression?
LAISSEZ-FAIRE
• Government takes ‘hands-off’ approach to the economy.
• Believe problem will go away.
FRANKLIN ROOSEVELT
• Democrat who defeated Hoover for President.• Offered New Deal to fix the depression