MAC TEST

Deflation

A decrease in the general price level of goods and services.

The Dow Jones Industrial Average

A measure based on the stock prices of 30 representative large firms trading on the New York Stock Exchange.

The Great Depression

The period from 1929 through the 1930’s during which the economy plummeted and unemployment skyrocketed.

Direct Relief

Cash payments or food provided by the government to the poor.

Herbert Hoover

The President during the first part of The Great Depression who believed that government could play a limited role in solving problems.

Bonus Army

10-20,000 WWI veterans and their families who arrived in Washington, DC in 1932 to support a bill for compensation for their wartime service.

What was the significance of Black Tuesday? (1)

It was the day when the stock market crashed.

Why was much of the prosperity of the 1920s more superficial than real? (1)

Many people were living beyond their means.

What was the one problem with speculation? (1)

The rising stock prices did not reflect the actual worth of companies.

Why did the Great Depression in America compound the problems that were already going on in Europe? (1)

Americans were unable to buy European goods during this time.

How did Hoover try to help people keep their homes and farms during his administration? (1)

He signed into law the Federal Home Loan Bank Act.

Why was spending and consumption of the 1920s ultimately unsustainable?

People were borrowing money to do all their shopping. Sooner or later, you can’t borrow anymore because no one will lend to you when you already owe a lot.

What two kinds of investments were people “betting” on by 1929?

The stock market and real estate.

What does it mean to buy stock “on margin”?

You borrow money you need to purchase the stock.

Why is deflation (falling prices) actually worse than inflation (rising prices)?

It forces businesses to cut expenses, which often means laying off employees. Ex-workers have no money to buy anything, so the demand for things falls.

What was Hoover’s explanation for why the Depression happened?

World War I.

How bad was the unemployment situation by early 1932?

More than 10 million were unemployed. About 20% of the workforce (even worse in urban areas/among minority populations).

Franklin Delano Roosevelt

Known as FDR created The New Deal and had a “can-do” attitude, in which he expanded the government’s role in the nation’s economy and citizens’ lives.

The New Deal

Policies focused on three general goals: relief for the needy, economic recovery, and financial reform.

Eleanor Roosevelt

The first lady and niece of Teddy Roosevelt, who was a social reformer who combined her deep humanitarian impulse with great political skills.

Social Security Act

Which had three components: old-age insurance for retirees 65 or older and their spouses, unemployment compensation, and aid to families with dependent children and people with disabilities.

What was the purpose of the Glass-Steagall Act of 1933 in establishing the Federal Deposit Insurance Corporation (FDIC)? (1)

To reassure people that their money was safe in the bank.

Why did conservatives attack New Deal laws? (1)

They felt the laws gave the federal government too much power.

What was Eleanor Roosevelt’s role in the New Deal? (1)

She advocated for people who were typically underrepresented.

What was the purpose of the Works Progress Administration? (1)

To quickly create as many jobs for as many people as possible.

Why was Frances Perkins significant? (1)

She was the first female cabinet member.

How did Mary McLeod Bethune use her position to benefit the African American community? (1)

She organized a group of African Americans to advise the president on racial issues.

What was the effect of the New Deal’s protection of worker rights? (1)

Union membership increased greatly.

What role did popular movies serve during the 1930s? (1)

They gave people a break from the hardships of the Great Depression.

What was the greatest impact of the New Deal? (1)

The power of the federal government expanded significantly.