Great Depression Quiz

What was the condition of the U.S. economy at the end of the 1920s?

The United States had the largest economy in the world and appeared very prosperous.

Who was president when the Great Depression began, and what did he predict?

Herbert Hoover predicted that poverty in the United States would soon be eliminated.

What event triggered the Great Depression?

The stock market crash of 1929.

How many banks failed after the 1929 crash?

About 9,000 banks failed.

Why is it incorrect to say the stock market crash was the only cause of the Great Depression?

The economy already had long-term weaknesses, such as overproduction, wealth inequality, and weak banking systems.

What problem resulted from businesses expanding too much during the 1920s?

Companies expanded to a “bubble point,” and workers could no longer afford to buy what was produced.

How did wages compare to corporate profits during the 1920s?

Corporate profits rose quickly, but wages increased slowly, widening income inequality.

How much wealth did the richest 1% of Americans own?

Over one-third of all American assets.

Why did wealth concentration limit economic growth?

The wealthy saved money instead of spending it back into the economy.

How did installment buying weaken the economy?

Middle-class Americans took on too much debt buying cars and appliances and couldn’t repay it during the downturn.

What weaknesses existed in the banking system?

Banks were poorly regulated, had no customer guarantees, and lent money to risky stock speculators.

What is buying stock “on margin”?

Purchasing stocks with borrowed money, sometimes up to 75% of the cost.

What were Black Thursday and Black Tuesday?

October 24 and October 29, 1929, when panic selling led to the stock market’s collapse.

How much did the New York Stock Exchange lose after the crash?

Over $30 billion disappeared, and its value fell from $87 billion (1929) to $15 billion (1932).

How did the Great Depression affect American society by the early 1930s?

Massive unemployment, soup kitchens, breadlines, declining wages, and widespread poverty reshaped American life.