THE GREAT DEPRESSION

CRASH OF 1929

• October 24: Panic selling led to stock market plummeting
• Businesses realized that they could not sell their products
• This led to cutbacks in production and layoffs
• As the economy continued to plummet, so did businesses

FAMILIES

• Unemployment increased while wages became lower
• Unemployment raised to 24.9%
• Shanty Towns were slums filled with crime, suicide, drug use, and disease

THE NEW DEAL

• Prevent collapse of banks and worker's rights to bargain and organize
• Jobs and farm subsidies, minimum wage, and social security
• The Keynesian economy thought that the problem was inadequate demand
• Wanted the government to stimulate the economy by increasing the money supply
• Thought this would lower the interest rates and encourage investment