THE GREAT DEPRESSION

CRASH OF 1929

• On October 24, 1929, the stock prices dropped in the US and investors lost their life savings
• Business was hurt because the crash caused overproduction and lost consumer demand

FAMILIES

• This economic decline affected jobs because many people became unemployed
• In the US the unemployment rate jumped to 25%
• The shantytowns were slums where people in poverty lived usually made of plywood or scrap metal

THE NEW DEAL

• Protected banking systems, farm subsidies, and massive public works were put in place to create jobs
• They created minimum wage, social security, and workers unions.
• Keynes challenged classical economic theory and argued depression was a problem with demand not supply
• He said Governments should play active role in stimulating economy and consumer demand