Warm-up:

1. How did Henry Ford impact production in the US?

2. What would happen if people saved more than they spent?

3. Spent more than they saved?

Get. Money.

• When I say “go”: turn to someone next to you and share some ways that can earn you money.

• When I say “go”: turn to someone next to you and share why someone might go broke, or lose money.

The Great Depression

Cash Rules Everything Around Me

• Economics– The production, consumption and

transfer of wealth

– Many different perspectives on how wealth is created, grown, and lost

Quick Jot: Many Money Problems

• Who in the country should know how an economy works? Why?

The Great Depression

• 1929-early 1940s

• The single greatest worldwide economic downturn in history.

• 25% unemployment rate in the USA

• 50% of banks failed

Yeah, but, so What?

HISTORY

• Why should we study the Great Depression?

“The Great Recession”

• Today.

• 2008-??

• Second greatest economic downturn in US History.

• Fear of entering into a second major depression(?)

Today vs. the Depression

Part 1 of Guidesheet

Before the crash

• The Stock Market

• The stock market was steadily climbing throughout the 1920s

• Many investors bought stocks with loans, confident that they could repay the loan and make a profit after the stock price went up

Cracks in the System• Eventually, the stock market ran out of new investors and prices

stopped rising

• Professional investors saw this coming and began selling their stocks

• The stock market started declining so even more people started selling which lowered prices even more…(and so on and so on)

• Investors loans were being called in and they couldn’t afford to pay them back

The Crash!

• October 29th, 1929 saw the biggest one-day drop in stock market history. It is known as Black Tuesday

• About $30 billion were lost over the next two weeks (roughly equal to the total wages earned by all Americans in 1929)

Part 2 of Guidesheet

After the crash• ALL Americans stopped buying new things out of fear, lack of money, or both

• Created a cycle of economic downturn

• Americans were unable to pay for items they bought on credit so companies would repossess them

• Unemployed move into “Hoovervilles”, or shanty-towns, named after US President Herbet Hoover

Cycle of Depression

Reduced spending

Less jobsHigher unemployment

Reduced production

Part 3 of Guidesheet

The New Deal

• Economist John Maynard Keynes offers solution to the cycle of depression: Government spending

• Franklin Delano Roosevelt is elected president and implements the New Deal

• This program increases government spending in the USA.

Recovery…

• Slowly but surely, the US recovers.

Today.• We study the

Great Depression to avoid a repeat

• Quick Jot: In what ways has the US today experienced similarities to the Great Depression? Differences?