Mr. Collins
U.S. History
Causes of the Great Depression
1. Speculation leads to the Stock Market Crash
Define the following terms
Speculation:
Broker:
Buying on Margin:
Bull Market:
Bear Market:
Answer the following questions
In your own words, summarize the problem of speculation in the stock market and the stock market
crash. How did this cause the Great Depression? (full sentences)
Captain Hindsight: If you were in a position of power, what would you have done to try to prevent this
problem? (full sentences)
Draw a picture that represents speculation in the stock market and the stock market crash.
2. Banking Crisis
Define the following terms
Interest:
Bank Run:
Captain Hindsight: If you were in a position of power, how would you have prevented or limited the
banking crisis that was one of the major causes of the Great Depression? (complete sentences)
Draw a picture that represents the banking crisis.
3. Overproduction and Underconsumption
Define the following terms
Overproduction
Underconsumption
Answer the following questions
Which Americans were the first to feel the pain of underconsumption?
What was the unemployment rate in 1933?
Captain Hindsight: If you were in a position of power, how would you have prevented or limited the
overproduction and undersconsumption which contributed to the cause of the Great Depression?
(complete sentences)
Draw a picture that represents overproduction and underconsumption.
4. Widening Wealth Gap
Fill in the blanks
In the 1920s, the wealthiest __________ percent of Americans received about __________________ of
all the money earned in the country. This was more than the bottom __________ percent of Americans
on the bottom of the income scale.
An estimated ____________ percent of Americans lived in poverty.
Between 1921 and 1929 personal debt more than ____________.
Answer the following questions
Do you think the problems of a widening wealth gap and overuse of credit are serious problems in
America today? (complete sentences)
Captain hindsight: If you were in a position of power, how would you have attempted to prevent or
limit the problem of a widening wealth gap and the overuse of credit that was a contributing cause of
the Great Depression? (complete sentences).
Draw a picture that represents the widening wealth gap.
5. Higher Interest Rates Decrease
the Money Supply
Define the following terms
The Federal Reserve System
Discount Rate
Answer the following questions
Most people agree that the Federal Reserve should have kept interest rates low after the stock market
crash. Explain what affect keeping interest rates low would have had on companies and consumers, and
why keeping interest rates low might have limited or prevented the Great Depression. (complete
sentences)
Draw a picture that represents the increased interest rate and the decreasing money supply.
6. High Tariffs cause
Trade Troubles
Define the following terms
Hawley-Smoot Tariff Act:
Answer the following questions
In what way did World War I create problems that would eventually be contributing causes to the Great
Depression?
Why did Congress think that higher tariffs would help American businesses?
Draw a picture that represents high tariffs.
Recap and Overview
List the 6 causes of the Great Depression in order of how much you think they contributed to the Great
Depression, from the most important cause (1) to the least important cause (6). Write a sentence
explaining your choices from most important and lease important causes.
1.
2.
3.
4.
5.
6.
Explanation of your rankings (complete sentences):
Many of these causes are interconnected with each other, which is part of the reason why pointing to a
specific cause of the Great Depression is so difficult.
Answer the following questions concerning how the different causes are interrelated.
How did the stock market crash eventually lead to bank runs in the United States? (complete sentences)
How did tariffs contribute to the problem of overproduction? (complete sentences)