PT2. The Fragile Recovery of the 1920s.

Apuntes

6.) What are the causes of the 1929 Stock Market Crash? - People brought too many stocks with borrowed money. - Stock prices were too high, not real. - Factories produced more than people could buy. - There was a lot of speculation (risky investments). - Banks gave bad loans. - People lost trust in the economy. 7.) What were the consequences of the 1929 Crash? (The Great Depression) - Rise of unemployment and poverty. - People ruined. - Banks stopped credit lines. Withdrawal of money of the banks. - Hoovervilles. - Spread of the crisis to: + Latin America —> because of the raw materials supply to USA. + Europe —> because of the claim of the lent money to Germany. 8.) What measures did President Franklin Roosevelt implement in the "New Deal"? - Public works network to simulate investment by large companies. - Farming subsides. Farmers were paid to produce less so that prices would rise and profits would rise and profits would increase for them. - Improving working conditions: + Shorter work day and higher salaries. + Minimum wage. + Unemployment insurance.