GREAT DEPRESSION. ESSENTIAL QUESTION What happens during an economic depression?

GREAT DEPRESSION

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.

OKIES

• Families traveling to look for work, food, shelter.

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