Podcast
Questions and Answers
What was a primary reaction of governments to the financial crisis following the Wall Street crash of 1929?
What was a primary reaction of governments to the financial crisis following the Wall Street crash of 1929?
Which economic measure did Great Britain adopt in September 1931 as a response to the crisis?
Which economic measure did Great Britain adopt in September 1931 as a response to the crisis?
What was one of the negative effects of tight control on capital flows during the Great Depression?
What was one of the negative effects of tight control on capital flows during the Great Depression?
How did countries respond to the downturn in world trade during the Great Depression?
How did countries respond to the downturn in world trade during the Great Depression?
Signup and view all the answers
What was the consequence of adopting bilateral clearing agreements during the Great Depression?
What was the consequence of adopting bilateral clearing agreements during the Great Depression?
Signup and view all the answers
What was one major initiative taken by Roosevelt while he was the governor of New York in response to poverty?
What was one major initiative taken by Roosevelt while he was the governor of New York in response to poverty?
Signup and view all the answers
What did Hoover establish in 1932 to assist the largest banks?
What did Hoover establish in 1932 to assist the largest banks?
Signup and view all the answers
Which consequence of the Great Depression significantly threatened democracy?
Which consequence of the Great Depression significantly threatened democracy?
Signup and view all the answers
What was one of the outcomes of Hoover's attempt to maintain a balanced budget?
What was one of the outcomes of Hoover's attempt to maintain a balanced budget?
Signup and view all the answers
What significant economic condition did the Wall Street crash of 1929 lead to?
What significant economic condition did the Wall Street crash of 1929 lead to?
Signup and view all the answers
What was Hoover's moratorium aimed at addressing during the international crisis?
What was Hoover's moratorium aimed at addressing during the international crisis?
Signup and view all the answers
How did the banks respond to the lowered discount rate by the Federal Reserve?
How did the banks respond to the lowered discount rate by the Federal Reserve?
Signup and view all the answers
What was the primary issue with the Reconstruction Finance Corporation's resources?
What was the primary issue with the Reconstruction Finance Corporation's resources?
Signup and view all the answers
What was one of the immediate consequences of the Wall Street crash of 1929?
What was one of the immediate consequences of the Wall Street crash of 1929?
Signup and view all the answers
How did deflation affect industrial countries during the Great Depression?
How did deflation affect industrial countries during the Great Depression?
Signup and view all the answers
What was a consequence of the liquidity race initiated by companies after the crash?
What was a consequence of the liquidity race initiated by companies after the crash?
Signup and view all the answers
Which sector evidenced visible effects due to the Great Depression?
Which sector evidenced visible effects due to the Great Depression?
Signup and view all the answers
What was a notable impact of declining production in the automobile industry post-crash?
What was a notable impact of declining production in the automobile industry post-crash?
Signup and view all the answers
What common effect did deflation have on primary goods-producing countries?
What common effect did deflation have on primary goods-producing countries?
Signup and view all the answers
How did the Great Depression impact international trade?
How did the Great Depression impact international trade?
Signup and view all the answers
What monetary policy did central banks adopt due to the gold standard after the crash?
What monetary policy did central banks adopt due to the gold standard after the crash?
Signup and view all the answers
Study Notes
The Crisis of Capitalism
- The lecture covers the Great Crisis, propagation of the crisis, and economic consequences.
- The signs of an economic crisis were present in the US in 1928.
- Prices fell, indicating overproduction.
- Problems arose in many industries.
- Agriculture slowed down significantly.
- Construction declined.
- Profits continued to grow, despite the problems in the market.
- Credit access was easy.
- Speculative investments were common in the stock market.
The Background
- The US banking system had many institutions not controlled by the Federal Reserve.
- The stock market expanded rapidly.
- Speculation increased, driven by large operators and easy credit.
- Investment trusts had few rules.
- The stock market boomed but was not linked to actual company profits.
Wall Street Crash of 1929 and Great Depression
- The 1929 stock market crash was the result of structural weaknesses in the US credit system.
- Interest rates rose to control speculation, attracting more capital to New York and weakening European countries' gold reserves.
- Two waves of selling brought the system to its knees in October 1929.
- The Dow Jones Industrial Average plummeted.
Charting the 1929 Market Crash
- The Dow Jones Industrial Average soared before the 1929 crash.
- The market did not recover from 1929 until after World War II.
- The graph presents the DJIA, noting the start and final days of the market crash of 1929 and the recovery point of 1954.
Wall Street Crash and Great Depression: Further Consequences
- The withdrawal of money from the New York market was tumultuous, affecting both US and foreign investors.
- Companies started reducing spending.
- In the automotive industry, production dramatically decreased.
- There were visible effects in the property sector.
International Industrial Production during the Great Depression
- A graph illustrates the decline of international industrial production in various countries from 1926 to 1938, compared to 1929.
Wall Street Crash of 1929 and Great Depression: Immediate Consequences
- American prices fell significantly.
- International trade decreased by 70%.
- The crisis spread to Europe.
- Commercial balances were jeopardized.
- New tariffs were introduced.
- Production decreased.
Wall Street Crash of 1929 and Great Depression: The Effects
- Unemployment rose to 26%.
- 20 % of the unemployed had no access to aid.
- Malnutrition affected 20% of schoolchildren.
- Insecurity and unemployment became risks to democracy.
Wall Street Crash and Great Depression: Reaction
- The Gold standard drove banks towards restrictive monetary policies.
- No one advocated for expansionary monetary policies.
- Defensive actions triggered liquidity crises and bank failures.
- Control of capital flows hindered international trade.
International Relations
- Efforts to collaborate internationally on combating the crisis were weak.
- The 1931 Hoover moratorium on inter-allied and reparations payments aimed at temporary relief.
- The 1932 Lausanne Conference canceled German reparations.
- The 1933 London Economic and Monetary Conference failed to stabilize currencies.
The beginning of the Welfare State
- The 1929 crisis exposed market imperfections.
- Government intervention became crucial in correcting market failures.
- Keynesian economics emphasized countercyclical policies to address economic crises.
- Keynes criticized Say's Law, arguing its applicability was limited in crisis contexts.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the factors leading to the Great Crisis and the Wall Street Crash of 1929. This quiz delves into the economic signs, the role of speculation, and the impact on various industries. Assess your knowledge on the economic conditions that resulted in the Great Depression.
