Causes of the Great Depression (copy)
Question 1
What was a major cause of the stock market crash of 1929?
High government spending on infrastructure
Overuse of credit and speculation in the stock market
Strong consumer demand for new products
Strict regulations on banks and businesses
Question 2
How did overproduction contribute to the Great Depression?
Factories refused to produce goods
Businesses could not afford to lower prices
More goods were produced than could be sold, leading to falling prices and layoffs
The government forced businesses to produce more goods
Question 3
What effect did the uneven distribution of wealth have on the economy before the Great Depression?
It allowed most Americans to invest in the stock market
It led to an increase in wages for most workers
It reduced the purchasing power of many Americans, limiting consumer spending
It helped businesses maintain stable profits
Question 4
Why did many banks fail during the early years of the Great Depression?
The government forced banks to close
Farmers refused to pay back their loans
Banks had invested heavily in the stock market and lost money when it crashed
There was too much money in circulation
Question 5
How did the Hawley-Smoot Tariff worsen the Great Depression?
It increased trade between the U.S. and other countries
It raised taxes on the wealthy
It led to a decrease in international trade as other nations imposed tariffs in response
It encouraged consumer spending in the U.S.
Question 6
Why did buying stocks on margin contribute to the stock market crash?
It allowed too many people to profit from the market
It forced people to save their money instead of investing
It created an unsustainable market where stock prices were artificially inflated
It gave the government too much control over the stock market
Question 7
How did declining farm prices contribute to the onset of the Great Depression?
Farmers earned higher profits and increased their production
Many farmers went bankrupt and could not repay their loans, causing banks to fail
The government increased subsidies to farmers
Consumers spent more on farm goods, boosting the economy
Question 8
How did the collapse of the stock market affect ordinary Americans, even those who did not invest?
It had little impact on their daily lives
Banks failed due to losses on stock investments, leading to a loss of savings for many people
Only wealthy investors suffered financial losses
The government compensated those who lost money in the stock market
Question 9
How did the banking crisis of the early 1930s contribute to the Great Depression?
People lost confidence in banks and withdrew their money, causing more bank failures
The government bailed out all banks before they could fail
New banks quickly replaced those that closed
Farmers received immediate relief through federal programs
Question 10
Why did the Great Depression become a global crisis?
The U.S. provided financial aid to struggling countries
Other countries depended on American loans and trade, and the downturn in the U.S. economy hurt them
The League of Nations imposed economic sanctions
The U.S. military was unable to intervene
Question 11
Which cause of the Great Depression do you think was most important? Describe the cause and explain why you believe it did the most to contribute to the Great Depression.
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