Vocabulary
Define inflation
-when there is a lack of goods/services and high demand, meaning prices go up
Until 1973, how did the USA represent/back up their currency?
What type of economy does the USA follow?
mixed economy, which is partly inspired by a free market and command economy
What time period was considered the Roaring Twenties?
1920-1929
What year did the stock market crash, signaling the start of the Great Depression?
1929
(October 1929, "Black Tuesday")
Define frozen credit
-banks are no longer giving out loans, or money stops circulating
money- the intangible system of value that makes exchange possible
currency- the tangible form of money, such as paper bills and coins
The Soviet Union is an example of a nation that practiced what type of economy?
Command Economy
The 18th Amendment, also known as _________, lead to the rise of organized crime, increased smuggling rates, underground entertainment, and lower tax revenue.
-Prohibition, or the ban on manufacturing and selling alcohol
Who was the president during the peak of the Great Depression?
Franklin D. Roosevelt (FDR)
Define the Gold Standard
a country’s government allows its currency to be freely converted into gold
What are some of the hidden drawbacks to having a regular checking account?
-monthly fees if you do not meet certain requirements
-overdraft protection processing fee
-easily lose track of money
It was theorized that ancient civilizations operated on a "gift economy" system. What does this mean and why does it no longer exist?
-trading one good for another, and it no longer is fesible since it relied too much on trusting your neighbors for a fair trade
How were women impacted by the Roaring Twenties?
-There was the rise of "flapper" women, or women who challenged the societal expectations of women during this time. This was fueled by more women entering the workforce during WWl
Explain what deflation is and the reasoning why it is considered more detrimental to society than inflation.
Deflation occurs when there are too many goods (overproduction) and low demands, so prices drop. This will causes businesses to cut cost, specifically in workers, which will increase unemployment.
Define a stock and the main location associated with the stock market in the US
-is a share of ownership in a company that gives the stockholder a claim on the company's assets and earnings
- Wall Street
What are the two main differences between a regular physical bank and a credit union?
-credit union is a non-profit
-physical bank branches provided more services
What was the name of the mentioned indigenous tribe hailing from the Australian mainlands and many of it's islands?
Aboriginal Australians
Although the nation's wealth doubled during this time period, what also increased (mainly due to WWl)?
The nation's debt, which increased by over $35 million.
How did banks play a big role in the Great Depression?
Banks were big on loaning large amounts of money to individuals who were investing in stocks. Eventually, as the markets crashed and people mass panic to take out all their funds, they did not have enough funds at hand, leading to many banks closing and many losing their money.
Define the "New Deal", and give an example
-a series of programs/projects instituted by Franklin D. Roosevelt aiming to restore USA prosperity
-encouraged to put money back in bank, TVA act, National Industry Recovery Act, etc.
What does a CD stand for and how does it work?
-certificate of deposit, which is a type of bank account where you agree to keep your money in an account for a certain amount of time
-the longer you save = the greater your return
-Penalty for withdrawing before the agreed upon term
-Typically good for short-term inventors who have an idea of when they’d need their money
What is the difference between representative money and fiat money?
-representative money relied on the money being equal to an amount of a certain good, such as gold
-fiat money is a promise from the nation's government that this type of currency will be accepted, even if not physically backed by anything
In "The Great Gatsby," which is set during the Roaring 20s, Gatsby himself was considered New Money. What does this mean and why was he judged?
-He did not grow up with wealth and earned it through business/trade. Mimicking real life sentiments, old money folks often looked down on new money individuals, since they had an "inferior" family legacy.
What is the Federal Deposit Insurance Corporation (FDIC) and what does it provide for us today?
It is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failure. Put in place in 1933, it was made to give people more assurance of the US financial system.
people are insured for up to $250,000