Causes of the great depression

• What percentage of Americans had low incomes below $2500 a year during the Great Depression era?

  71%
• There was a limited market for luxury items like radios and cars
• Over-production in industry was a major cause of the Great Depression.
• Car sales fell by ⅓ in 1924.
• The amount spent on construction dropped by $2 billion between 1926 and the late 1920s.
• What were the main problems facing farmers during the Great Depression?

  Debt and over-production
• Between 1930 and 1931, severe droughts worsened conditions for farmers.
• Steps leading to the failure of banks during the Great Depression

  1️⃣ Banks had limited resources

  2️⃣ Only 1/3 were part of the Federal Reserve System

  3️⃣ Banks cut loans to businesses

  4️⃣ Faith in the banking system collapsed

  5️⃣ Many banks and businesses suffered
• What made it difficult for the government to help banks during the Great Depression?

  Limited Federal Reserve membership
• Banks took spending power away from consumers during the Great Depression.
• During World War I, the USA lent money to other countries.
• Why did American exports stop during the Great Depression?

  High tariffs were imposed
• Germany attempted to become self-sufficient during the Great Depression.
• Match the cause of the Wall Street Crash with its effect:

  Buying shares wildly ↔️ Increased demand and confidence

  Bull pools ↔️ Artificially inflated prices

  Weakened confidence ↔️ Collapse of the system
• What did bull pools encourage inexperienced investors to do during the Great Depression?

  Speculate on stocks