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The Great Depression, 1929-1941 Part A

The Great Depression, 1929-1941 Part A. During the 1920s, the United States, in many ways, had a booming what? Economy 2. In what ways did the American economy do well during the 1920s? The Stock Market increased in value Many Americans purchased large amounts of consumer goods

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The Great Depression, 1929-1941 Part A

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  1. The Great Depression, 1929-1941Part A

  2. During the 1920s, the United States, in many ways, had a booming what? • Economy 2. In what ways did the American economy do well during the 1920s? • The Stock Market increased in value • Many Americans purchased large amounts of consumer goods • Mass entertainment (sports, movies, radio) became more common, and more and more Americans partook of these new innovations and technologies

  3. 3. During the 1920s, what was a fundamental problem facing American farmers? • Agricultural production had increased, but many farmers had over-produced, thus driving down prices • Thus it was hard for many farmers to make a profit 4. What problem did many American consumers have? • Many went deep into debt, as did many farmers

  4. 5. During the 1920s, railroads began to lose business and profits to what competition? • Cars, trucks, and busses • Hence, railroad companies were no longer as prosperous as before 6. Many major industries like timber, coal mining, textiles, and steel experienced reductions in what? • Profits

  5. 7. As the 1920s progressed what also declined? • Housing starts • That is, fewer and fewer new homes were being built 8. During WWI, agricultural product prices had generally done what? • Gone up

  6. 9. Hence, farming enterprises had done what? • Expanded • More land was in use, and more products being produced 10. But what happened to crop prices after WWI? • They declined by as much as 40%

  7. 11. When Congress passed the McNary-Haugen bill, a proposed law that would require the government to buy surplus agricultural products, thus ensuring higher prices, how did President Calvin Coolidge (a Republican who served from 1923-1929) react? • He vetoed the bill, and thus the Price-Support bill did NOT become law

  8. 12. By the late 1920s, American consumers were doing what? • Buying fewer and fewer products • Spending less and less money 13. What were some major reasons for this decline in consumer demand? • Rising prices • Stagnant wages • Disparity of income (Some people were doing OK while many were not) • Many consumers held high levels of debt by the late Twenties

  9. 14. In economic, what is Demand? • Demand is a “schedule” of the amounts of a given good or service that someone is willing to buy at a given price 15. Generally, if the price of a good/service goes up, the demand for that good goes where? • Down • In short, the more costly a product is, then the less of it we will be willing to buy

  10. 16. For a person or organization to have real demand, what factors must be present? • The potential buyer must desire the product • The potential buyer must have the means to buy the product • The potential buyer must be willing to buy the product at the moment of truth

  11. 17. In economics, what is supply? • Supply is a “schedule” of an amount of goods a person or firm will be willing to offer for sale at a given price 18. Generally, if a person or firm perceives the opportunity to sell a given product at a higher price, then will more or fewer of that product be offered for sale? • More…generally speaking • For example, if the Flora-Bama thinks that consumers will buy “Mullet Toss” T-Shirts at $25 per shirt as opposed to $10, it will offer more shirts for sale at $25 than it would at $10.

  12. 19. Thus, for supply to be real, what factors must be present? • The firm must desire to sell the product • The firm must have the ability to sell the product • The firm must be willing to sell the product at the moment of truth

  13. 20. Regarding the income gap between the “haves” and “have-nots” during the 1920s, one might say what? • To an extent, the rich got richer and the poor got poorer 21. Because so many Americans were living on credit (the excessive borrowing of money, that is) during the 1920s, there existed an illusion of what, for America in general? • An illusion of prosperity • By the way, does any of this sound familiar? Remember what happened in 2008?

  14. 22. From 1920 to 1929, the income of the wealthiest 1% of the American population rose by what? • 75% 23. From 1920 to 1929, for Americans as a whole, income rose by what? 9%

  15. 24. What dollar amount (at some point in the 1920s) was considered the minimum needed yearly income for a decent standard of living for a household? • $2,500 per year 25. At some juncture in the 1920s, what percentage of the American population (households) was earning less than $2,500 per year? • 70%

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