The Great Depression

Crash of 1929

• The crash was a devastating event that was unparalleled in its time
• 2 out of 5 dollars loaned from a bank were used in the stocks
• The large amount of borrowed and imaginary money used on quickly declining stocks
• When stocks crashed, withdrawals and trades were made at an alarming rate
• Due to these factors, this left the banks unable to repay the people and closed

Businesses

• The stock crash caused many businesses to lose value and in turn closed
• With the loss of markets, the loss of jobs quickly followed
• businesses and people who lost their deposits in banks when they went bankrupt
• With a worsening economy, the businesses overproduced as well

Families and Jobs

• With the decline, people were payed off, jobs became more scarce
• At one point the unemployment rate rose to one out of every four Americans
• The wages would obviously lower as well, so those with jobs still lost
• Shantytowns consisted of poor shacks and housed the lower class or homeless

The new deal

• The first attempt was a relief effort, by simply pumping in money
• The second was a series of acts that allowed farmers to improved production
• Such as the social security act
• The government was basically looking for anything to alleviate the weight of the crash
• Started with the businesses such as relief funds and stimulating the economy

Keynesian Economics

• Short term problem solving
• Looked to increase demand to make more jobs, and businesses
• Used in times of recession
• Long term may cause inflation
• Meant for mostly relief that would later hinder the economy anyways