The Roaring Twenties
Which country experienced a major economic boom throughout the 1920s?
The United States of America.
What is the term for money that a person or business owes?
Debt.
What is speculation in the stock market?
Buying and selling shares in the hope of making a profit from price changes.
In which month and year did the Wall Street Crash occur?
October 1929.
What was the name of the severe economic crisis that followed the Wall Street Crash?
The Great Depression.
Which US president famously declared, "The business of America is business"?
Calvin Coolidge
Approximately how much was public and private debt by 1930?
More than $150 billion.
What does buying shares "on the margin" mean?
Borrowing money to buy shares.
What was the name given to Thursday, 24 October 1929, when panic gripped the stock market?
Black Thursday.
How many banks were forced to close within three years of the crash?
Approximately 5,000 banks.
Which three Republican presidents governed during the 1920s and supported business-friendly policies?
Warren G. Harding, Calvin Coolidge and Herbert Hoover.
What economic problem occurs when businesses produce more goods than consumers can buy?
Market saturation or oversupply.
From how much to how much did stockbrokers increase their bank borrowing between 1927 and 1929?
From $3.5 billion to $8.5 billion.
Approximately how much money was lost in the stock market over a few weeks during the crash?
About $30 billion.
What were the towns called where people built their houses from scrap metal, wood, and cardboard? Bonus points if you can explain why.
Shantytowns or Hooverville.
The public held Herbert Hoover and his administration directly responsible for the economic devastation and widespread homelessness of the Great Depression.
What did Herbert Hoover suggest about American prosperity during his 1928 presidential campaign?
That prosperity was widespread and the country was approaching the abolition of poverty and fear.
By 1933, how many Americans were officially recorded as unemployed, according to the presentation?
Approximately 15 million.
Why was buying shares on the margin particularly dangerous if share prices began to fall?
Investors could lose money on their shares and be unable to repay the money they had borrowed.
What happened on Tuesday, 29 October 1929, when confidence in the stock market had collapsed?
Massive share selling continued, with approximately 16.4 million shares sold and stock prices continuing to fall. This day became known as Black Tuesday.
What does the term laissez-faire mean, and how did it influence Herbert Hoover's response to the Depression?
It refers to limited government intervention in the economy. Hoover emphasised cooperation between those involved in economic life and did not see direct relief for struggling Americans as the government's responsibility.
Why did many Americans fail to recognise the dangers developing within the economy during the 1920s?
The apparent economic boom and widespread confidence in prosperity concealed serious underlying economic weaknesses.
Explain how high debt and market saturation could contribute to an economic depression.
Debt made it harder to repay loans during a downturn, while oversupply reduced demand for goods. Business failures and unemployment then further reduced consumer spending.
How could rising share prices create a self-reinforcing speculation boom, and why was this unsustainable?
Rising prices encouraged investors to buy more shares, often with borrowed money, pushing prices even higher. The boom was unsustainable because share prices could exceed the real value of companies and eventually fall.
Why did the stock market crash, and what was the key factor that caused investors to sell their shares in panic?
The market was overvalued and supported by little real wealth. As prices fell, investors lost confidence and rushed to sell their shares to minimise losses, intensifying the crash.
Explain the chain reaction that turned the stock market crash into a wider economic depression.
Falling share prices damaged confidence and left borrowers unable to repay loans. Banks failed, businesses collapsed, unemployment rose, consumer demand fell, and reduced lending further weakened business activity. These effects spread beyond the United States to other countries.