The Great Depression-American Studies-Content Statement 19

What was one major cause of the Great Depression related to banking practices?

Excessive lending by banks

Increased consumer credit contributed to the Great Depression.

It led to unsustainable levels of consumer debt

What was the Federal Reserve's response to excessive lending practices?

Constricted the money supply

How did the Federal Reserve's actions worsen the economic crisis?

Made it more difficult for people to repay debts and for businesses to operate

What was a major cause of stock market speculation before the Great Depression?

Investors buying on margin

What happened when the stock market crashed in 1929?

Many investors lost their investments and fortunes

Why did consumer debt rise after the stock market crash?

Workers lost income as businesses closed

Which legislation was designed to provide financial security for elderly Americans?

Social Security Act

What was the purpose of the National Recovery Administration (NRA)?

To regulate industry and create fair competition

Which agency was created to regulate the stock market and prevent future crashes?

Securities and Exchange Commission (SEC)

Which New Deal program was created to insure bank deposits?

Federal Deposit Insurance Corporation (FDIC)

What was the purpose of public works programs like the Works Progress Administration (WPA)?

To create jobs and stimulate the economy

How did the Tennessee Valley Authority (TVA) impact rural areas?

Provided electricity and economic development

What was a key goal of the Civilian Conservation Corps (CCC)?

Provide jobs for young men in environmental conservation

How did the New Deal change the role of the federal government?

Expanded government intervention in the economy

Why was the Social Security Act a significant piece of legislation?

It established a government-funded retirement program

What was one criticism of the New Deal programs?

Benefits were unevenly distributed among social classes and minorities

How did bank failures contribute to the Great Depression?

People lost their savings, leading to reduced spending

Which economic factor made it difficult for businesses to continue operating?

Restricted access to credit due to Federal Reserve policies

How did buying stocks on margin contribute to economic collapse?

It created artificial stock market growth and instability

Which factor led to a cycle of economic decline during the Great Depression?

Businesses closing and workers losing income

How did the WPA help reduce unemployment?

By funding large-scale public infrastructure projects

Why was the SEC created?

To regulate the stock market and prevent fraudulent practices

What was the impact of the FDIC on banking?

Restored public confidence in banks by insuring deposits

How did the expansion of the federal government during the New Deal affect future policies?

It set a precedent for government involvement in economic and social welfare