What did buying on the margin do for the stock prices?
it drove the prices higher
What problem arose when people would borrow money and plan to pay it back later?
brokers would demand repayment when the market crashed
The nation was already poor, T or F?
True
What was a result of agriculture being in recession?
Steel, railroad, textile, and auto industries see a decline in sales
Why were there high levels of debt?
- low interest rates
- easy credit
What did decreased demand lead to?
decreased jobs
What events led up to the Great Depression?
- stock market crash
- nation being poor
- high levels of debt
- agriculture in recession
- increased unemployment
What were factors of the bank runs?
- 9 million savings accounts wiped out
- lose bank investments in stocks and depositor money
What were effects of the farms being forclosed?
- head out west for migrant work
- dust bowl
what caused a trade war in 1930?
Hawley-Smoot tariff
What was Hoover’s response to the trade war?
- no strong response
- $2 billion to businesses but none to consumers
Why was FDR more popular than Hoover?
- he showed great optimism
What were the ideas on how to deal with the power of big business?
1) break them up and redistribute wealth?
2) allow big business cooperation rather than competition
3) central planning of economy
4) replace capitalism
What did they decide on to deal with big business?
abandon laissez-faire, but keep capitalism
