Great Deppression/New Deal Quizlet flashcards
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Created by:
jwswaynejr on June 7, 2012
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ID's for words in the subjects of the great deppression or new deal
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16 terms
Terms | Definitions |
|---|---|
 Credit | Credit was the new idea in the 1920's of buy now, pay later. It made people go out and buy stuff that they did not have enough money for now but they thought they would later |
| Buying on margin | Buying on margin was a way of buying stocks where the investor would get a loans from their broker, using the stock they already owned as collateral, to buy more stocks. They would pay the broker back when they made the money back from selling the security at a profit. This was one of the leading causes of the Great Depression because when people started selling off all of their securities, first to make a profit, and then just to sell becasue they had no money, there was no one to buy them. If they couldn't sell them, they couldn't pay back the money they owed. |
| Black Tuesday | Black Tuesday was October 29th 1929. From Black Thursday to Black Tuesday the stock market lost over $26 billion in valuea and over 30 million stocks were traded. The stock market decreased by a record amount |
| The Great Depression | The Great Depression was the time period in the world generally from the 1930s to the early 1940s when most of the world was in an economic deppression. In America the Great Depression was the worst economic problem that they had ever had. there were many causes of the Great Depression but there are 6 widley accepted main reasons 1.Speculation on the stock market 2. Bank failures 3. overproduction 4.underconsumption 5. unequal distribution of wealth 6 the collapse of the global economy |
| Herbert Hoover | Herbert Hoover was one of the Presidents during the Great Depression. He was a firm believer in rugged individualism, or that the governmont should not help the people too much and that they should get out of the depression themselves. This idea shows in alot of the choices he made in comparison with FDR, the next President. For example Hoover did not take immediate action nor did he believe in relief funds or welfare because his opinion was that indiviuals should take care of themselves. |
| Hoovers Philosiphy | Hoover believed in what was called rugged individualism. This meant that he believed that the people of America needed to get out of the Depression themselves through hard work and not from governmont assistance. |
| Federal Home Loan Bank Act | The Federal Home Loan Bank Act created an amount of money that coulld be used to give to the public as home loans. This act was passed to try and help the rising forclosure rate. |
| Reconstruction Finance Corperation | The Reconstruction Finance Corporation played a large role in controlling the Great Depression. The organization which was backed by the government was made to give loans to industrial, financial, and agricultural industries to help them during the deppression. |
| Bonus Army | The Bonus Army was the nick name given to the group of about 17,000 World War I veterans who gathered in Washington D.C.. After the war, in 1924, the World WarAdjusted Compensation Act awarded them bonus certificates that could be redeemed in 1945. Their goal was to get the money that they were promised now, when their families needed it to survive, as there were no jobs to have after they came back from the war. |
| Causes of the great deppression | 1. overproduction 2. under consumption 3.collapse of global economy 4.bank failures 5.unequal distribution of wealth 6.speculation on stock market |
| overproduction | over production is when a company makes too much of an item, causing a supply that is bigger than the demand so the items price drops too low and the company starts to lose money because they are not getting enough money through sales. |
| underconsumption | Underconsumption is when the public or the consumer does not not buy enough of the products that a company makes and the company starts to lose money because they are not selling anything. |
| unequal distribution of wealth | unequal distribution of wealth is when the gap beetween the lower class and the upper class is too large and the rich have too much money and the poor have no money. This was one of the causes of the Great Depression. Unequal distribution of wealth can lead to other economic problems such as underconsumption when the majority of the people do not have the money to buy the goods a company is producing. |
| speculation | Speculation on the stock market was one of the reasons for the Great Depression. People had invested large amounts of their money in the stock market. As long as companies were doing well, they became rich by selling their stock at a profit. When the value of the companies (stocks) started to fall, and there was no one to buy your stock, so you have no money and a worthless stock. When you buy a stock, you are betting that you will be able to sell it for more money. Speculation does not guaranty a profit, it is a bet. |
| bank failures | During the economic boom before the Great Depression, the banks invested most of their money in the stock market. When the stock market crashed the banks lost all of their money and they went bankrupt and to make things worse the run on banks came and all of the people came to get their money out of the banks so the banks had no money the time that to give and they had to close. The time when all the people went to the banks to try and get their money back was called the run on banks. |
| collapse of the global economy | The collapse of the global economy was one of the main causes of the Great Depression. To try and fix the economy, the government passed a number of tariffs or taxes including the Smoot-Hawley Tariff and the Fordney-McCumber Tariff. These tariffs caused a tax on imported goods, which resulted in the goods being more expensive. The goal was to force people to buy American made products, so Americans would get jobs making the products. Unfortunately, since other countries were doing bad also, they responded by creating tariffs on American products making them more expensive overseas. This lost this country money since the unemployed here couldn't afford to buy the goods aamerican goods either. |
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