The Great Depression in Canada

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson
Download our mobile app to listen on the go
Get App

Questions and Answers

When did the Great Depression start?

With a stock market crash on October 29th, 1929.

What were the primary effects of the Great Depression?

Massive unemployment, numerous bankruptcies, climatic disasters (like the Dust Bowl), and widespread poverty.

What societal changes emerged from the Great Depression?

New attitudes surrounding the poor, the creation of social safety nets, and the introduction of new political parties.

Which country's actions are considered the primary cause of the Great Depression?

<p>It is often considered an American-made depression.</p>
Signup and view all the answers

What were the main causes of the Great Depression in Canada?

<p>Overproduction, reliance on staple products, dependence on the American economy, the stock market crash, tariffs, and international debt.</p>
Signup and view all the answers

What does 'overproduction' mean in the context leading up to the Great Depression?

<p>Following the economic boom of the 1920s, industries expanded production rapidly, leading to large stockpiles of unsold goods.</p>
Signup and view all the answers

How did overproduction contribute to the Great Depression?

<p>Large quantities of unsold goods caused factory owners to panic, leading them to lay off workers. Unemployed workers had less money to spend, further slowing down sales.</p>
Signup and view all the answers

Explain Canada's reliance on staple products before the Great Depression.

<p>Canada heavily depended on selling staple products like crops, timber, and minerals. While harvests were initially good during the boom, competition from other countries led to large unsold quantities and lower prices.</p>
Signup and view all the answers

What were Canada's main staple products before the Great Depression?

<p>Crops (like wheat), timber, and minerals.</p>
Signup and view all the answers

What was the Dust Bowl of the 1930s?

<p>A period where farmers in the prairies faced severe droughts and high winds that spread dust, destroying topsoil and preventing crops from growing.</p>
Signup and view all the answers

How did reliance on staple products and the Dust Bowl contribute to the Depression in Canada?

<p>Competition from other countries with high yields lowered prices, and the Dust Bowl devastated Canadian crop production. This led to less product being sold at lower prices, causing layoffs and reducing consumer spending.</p>
Signup and view all the answers

Why was Canada's dependence on America a significant factor in the Great Depression?

<p>Canada relied heavily on staple exports. Since 40% of Canada's exports went to America, the crash of the US economy severely hurt the Canadian economy.</p>
Signup and view all the answers

How did the stock market crash occur, particularly concerning wheat stocks?

<p>Investors had heavily invested in wheat. As wheat stocks began to lose value, investors lost confidence and rapidly sold their stocks in large volumes to avoid further losses. This mass selling made the stocks effectively worthless.</p>
Signup and view all the answers

What did Canadian bankers believe about the economy before the crash?

<p>They believed Canada's economy depended heavily upon the international wheat trade, even though there were indications that wheat prices were falling.</p>
Signup and view all the answers

What does 'buying on margin' mean?

<p>Buying stock using borrowed money (a loan), hoping the stock's value would increase, allowing the investor to sell the shares for a profit and repay the loan. This is also known as speculation.</p>
Signup and view all the answers

What is 'overextension of credit'?

<p>A situation where a loan is larger than the borrower can realistically repay. This led to growing debt during the 1920s fueled by high consumer confidence.</p>
Signup and view all the answers

How did the stock market crash lead to the broader Great Depression in Canada?

<p>Although few Canadians owned stocks directly, the crash caused the value of Canadian companies' stocks to drop and the prices for their products to fall, leading to widespread unemployment.</p>
Signup and view all the answers

What is economic protectionism, and why did the USA adopt it before the Great Depression?

<p>The USA, having significant domestic production, didn't heavily rely on foreign materials. They introduced tariffs (taxes on imported goods) to protect their internal industries. This policy is known as protectionism.</p>
Signup and view all the answers

What are tariffs?

<p>Duties (taxes) paid by the consumer on goods entering a country from international sources.</p>
Signup and view all the answers

What were the effects of US tariffs on Canada?

<p>Canada lost a major export market as Canadian products became more expensive in America. In response, Canada imposed its own counter-tariffs to protect its industries, further restricting international trade.</p>
Signup and view all the answers

How did post-WWI debt and US tariffs affect Canada's ability to repay loans?

<p>After WWI, the US lent money to other nations, including allies involved in the war effort which indirectly affected Canada. To repay debts, countries like Canada relied on selling products to the USA. US tariffs reduced international trade, limiting Canada's ability to raise money and repay its loans.</p>
Signup and view all the answers

What does government 'revenue' typically refer to?

<p>Money collected by the government, usually through taxes (like income tax, sales tax) and customs duties (tariffs).</p>
Signup and view all the answers

What forms does individual revenue take?

<p>Salary (usually calculated annually) or hourly pay rates.</p>
Signup and view all the answers

How is business revenue defined?

<p>Profit generated from the products sold or services rendered.</p>
Signup and view all the answers

What is the primary source of government revenue?

<p>Taxes.</p>
Signup and view all the answers

What are government 'expenditures'?

<p>Government spending on various programs and services.</p>
Signup and view all the answers

What are common examples of individual expenses?

<p>Housing, food, insurance, utilities, taxes, transportation, clothing, etc.</p>
Signup and view all the answers

What are common examples of business expenses?

<p>Property costs (rent or mortgage), raw materials, employee wages, taxes, advertising, utilities, etc.</p>
Signup and view all the answers

Give examples of government expenses at the federal, provincial/state, and municipal/local levels.

<p>Federal: defense, foreign affairs, telecommunications. Provincial/State: highways, healthcare, education. Municipal/Local: sewage systems, libraries, public transit.</p>
Signup and view all the answers

What is a government 'budget'?

<p>A government's spending plan. It totals expected revenues and announces planned expenditures, showing the government's spending priorities.</p>
Signup and view all the answers

What is a 'balanced budget'?

<p>A budget where government expenditures and revenues are equal. Traditionally, before the Great Depression, governments often aimed for balanced budgets.</p>
Signup and view all the answers

What is a budget 'surplus'?

<p>A budget where government revenue is greater than its expenditures. Sometimes referred to as being 'in the black'.</p>
Signup and view all the answers

What is a budget 'deficit'?

<p>A budget where government expenditures are larger than its revenue. The difference represents the deficit amount, often referred to as being 'in the red' or 'in debt' for that period.</p>
Signup and view all the answers

What is another way to define a government deficit in terms of borrowing?

<p>The total amount of money borrowed by the government within that specific year to cover the shortfall between expenditures and revenue.</p>
Signup and view all the answers

What is 'currency'?

<p>The specific type of money used by a country (e.g., US Dollar, Canadian Dollar, Euro).</p>
Signup and view all the answers

Historically, what often determined a currency's value?

<p>The amount of gold or silver held by the country, known as the gold standard or bimetallism.</p>
Signup and view all the answers

In modern times, what factors determine a currency's value?

<p>Factors such as the Gross Domestic Product (GDP), the size of the national debt, interest rates, political stability, and its value compared to other currencies in foreign exchange markets.</p>
Signup and view all the answers

What does GDP stand for and what does it measure?

<p>GDP stands for Gross Domestic Product. It measures the total value of goods and services produced within a country's borders over a specific period, typically a quarter or a year.</p>
Signup and view all the answers

Define 'capitalism'.

<p>An economic system characterized by private ownership of the means of production and the exchange of goods and services through a network of markets.</p>
Signup and view all the answers

What is a 'market economy'?

<p>An economic system where decisions regarding production, investment, and distribution are guided by the price signals created by the forces of supply and demand between producers and consumers.</p>
Signup and view all the answers

What role does 'supply and demand' play in a market economy?

<p>It forms the primary pricing structure. The interaction between the availability of goods (supply) and consumers' desire for them (demand) determines prices.</p>
Signup and view all the answers

Define 'supply' in economics.

<p>The availability of a particular good or commodity in the market.</p>
Signup and view all the answers

Define 'demand' in economics.

<p>How badly consumers want a particular good or commodity.</p>
Signup and view all the answers

What is the 'business cycle'?

<p>A recurring cycle of economic expansion (prosperity) and contraction (recession), historically observed to occur roughly every 5-6 years. Some politicians believed this cycle could naturally correct itself.</p>
Signup and view all the answers

Define 'recession'.

<p>A period when economic activity is in decline, typically characterized by falling GDP, rising unemployment, and reduced consumer spending.</p>
Signup and view all the answers

Define an economic 'boom'.

<p>A period of extreme economic prosperity, characterized by high growth, low unemployment, and strong consumer confidence.</p>
Signup and view all the answers

Define an economic 'bust'.

<p>A serious economic downturn that often follows a boom. It can lead to a prolonged recession, sometimes called a depression.</p>
Signup and view all the answers

What was the dominant economic approach in the 19th century?

<p>Laissez-faire.</p>
Signup and view all the answers

What does 'laissez-faire' mean?

<p>Literally 'let do' or 'let it be'. It refers to an economic doctrine advocating minimal government interference in the economy.</p>
Signup and view all the answers

Why was laissez-faire economics not fully restored after WWI?

<p>Governments found it necessary to exercise more control over social and economic issues to manage the post-war situation and subsequent challenges. This trend towards greater government intervention has continued.</p>
Signup and view all the answers

Where did the global financial center shift to after WWI?

<p>It moved from London, UK to New York City, USA.</p>
Signup and view all the answers

Describe the general state of the global economy in the 1920s.

<p>Most countries, with some exceptions like Great Britain, experienced economic booms during the 1920s, largely based on increased consumer demand and industrial production.</p>
Signup and view all the answers

When did the Great Depression start?

<p>With a stock market crash on October 29th 1929.</p>
Signup and view all the answers

What were the primary effects of the Great Depression?

<p>Massive unemployment, numerous bankruptcies, climatic disasters (like the Dust Bowl), and widespread poverty.</p>
Signup and view all the answers

What societal changes emerged from the Great Depression?

<p>New attitudes towards the poor, the creation of social safety nets (like unemployment insurance and social assistance), and the rise of new political parties or ideologies.</p>
Signup and view all the answers

Which country's economic issues primarily triggered the Great Depression?

<p>The United States.</p>
Signup and view all the answers

What were the main causes contributing to the Great Depression in Canada?

<p>Overproduction of goods, heavy reliance on exporting staple products (like wheat and timber), strong economic dependence on the USA, the stock market crash, high international tariffs, and debt from WWI.</p>
Signup and view all the answers

What does 'Overproduction' mean in the context leading up to the Great Depression?

<p>During the economic boom of the 1920s, industries expanded production capacity significantly. When demand eventually slowed, this led to large stockpiles of unsold goods.</p>
Signup and view all the answers

How did overproduction contribute to the onset of the Great Depression?

<p>Large quantities of unsold goods caused factory owners to panic. They cut production and laid off workers. Unemployed workers had less money to spend, further reducing demand for goods and worsening the economic slowdown.</p>
Signup and view all the answers

What is meant by Canada's 'Reliance on Staple Products' before the Depression?

<p>Canada's economy was heavily dependent on the production and export of primary commodities (staples) like crops, timber, and minerals. Even with good Canadian harvests, competition from other countries producing high yields led to large unsold quantities and falling prices for these staples.</p>
Signup and view all the answers

What were Canada's main staple products during this era?

<p>Agricultural crops (especially wheat), timber, and minerals.</p>
Signup and view all the answers

What was the 'Dust Bowl' of the 1930s?

<p>A period of severe drought combined with extensive farming and poor land management practices in the prairies (Canadian Prairies and US Great Plains). This resulted in massive dust storms that damaged agriculture and ecological balance.</p>
Signup and view all the answers

How did Canada's reliance on staple products and the Dust Bowl collectively worsen the Depression in Canada?

<p>Increased international competition pushed down prices for Canadian staples. Simultaneously, the Dust Bowl devastated agricultural production in the Prairies. This combination led to lower export revenues, farm failures, layoffs in related industries, and reduced overall consumer spending.</p>
Signup and view all the answers

Explain Canada's 'Dependence on America' as a contributing factor to the Depression in Canada.

<p>Canada's economy relied heavily on exporting its staple products, and the United States was its largest trading partner, buying around 40% of Canadian exports. When the US economy crashed, demand for Canadian goods plummeted, severely impacting Canadian industries and employment.</p>
Signup and view all the answers

Describe the 'Stock Market Crash' element related to wheat speculation.

<p>Investors had heavily invested in commodities like wheat. As global wheat prices began to fall due to oversupply and competition, investors lost confidence and rushed to sell their stocks ('shares') in large volumes before prices dropped further. This mass selling accelerated the price collapse, making many CWB stocks nearly worthless.</p>
Signup and view all the answers

What belief did many Canadian bankers hold regarding the economy just before the crash?

<p>They generally believed that Canada's economic health fundamentally depended upon the international wheat trade, even though there were clear indicators that global wheat prices were falling.</p>
Signup and view all the answers

What does 'Buying on Margin' mean in the context of stock investing?

<p>It refers to purchasing stocks by borrowing part of the purchase price from a broker. The investor hopes the stock price will rise, allowing them to sell the shares, repay the loan, and make a profit from the difference. This practice is also known as speculation.</p>
Signup and view all the answers

What is meant by 'Overextension of Credit'?

<p>This refers to a situation where individuals or businesses borrow more money than they can realistically afford to repay. During the 1920s, high consumer confidence and readily available loans led to a significant increase in overall debt levels.</p>
Signup and view all the answers

How did the stock market crash contribute to the Great Depression for average Canadians, even those who didn't directly own stocks?

<p>The crash caused the value of companies to plummet. Businesses faced financial difficulties, leading them to cut production, lower wages, and lay off workers. Falling prices for products, especially agricultural goods, also reduced incomes. This resulted in widespread unemployment and economic hardship across the country.</p>
Signup and view all the answers

What is 'Economic Protectionism' and how did the US practice it leading into the Depression?

<p>Economic protectionism is a policy where a country restricts imports from other countries through methods like tariffs and quotas to protect its domestic industries from foreign competition. The US, aiming to shield its internal industries (especially agriculture and manufacturing), enacted high tariffs (like the Smoot-Hawley Tariff) on imported goods.</p>
Signup and view all the answers

What are tariffs?

<p>Tariffs are taxes or duties imposed by a government on goods imported into the country. These costs are typically passed on to the consumer, making imported goods more expensive than domestic ones.</p>
Signup and view all the answers

What were the effects of high US tariffs on Canada's economy?

<p>Canada lost a crucial export market as its goods became significantly more expensive for Americans to buy. In retaliation and to protect its own industries, Canada imposed counter-tariffs on US goods. This cycle of protectionism further restricted international trade and deepened the economic crisis for export-reliant Canada.</p>
Signup and view all the answers

How did international debt accumulated after World War I contribute to the severity of the Depression?

<p>After WWI, the US was a major creditor, having lent large sums to Allied nations, including supporting loans to Canada. These countries, particularly European nations, relied on exporting goods (often to the US) to earn the revenue needed to repay these debts. High US tariffs reduced their ability to sell goods and earn foreign currency, making debt repayment extremely difficult and contributing to global financial instability.</p>
Signup and view all the answers

Define 'Revenue' in a government context.

<p>Revenue refers to the income collected by a government, primarily through sources like taxes (income, sales, corporate), customs duties (tariffs), fees, and other levies.</p>
Signup and view all the answers

What typically constitutes an individual's revenue?

<p>Income earned from employment, usually in the form of a salary (paid annually or monthly) or wages (paid hourly or daily). It can also include income from investments or self-employment.</p>
Signup and view all the answers

What constitutes revenue for a business?

<p>The total amount of money generated from the sale of its goods or services before deducting expenses. Profit is the revenue minus expenses.</p>
Signup and view all the answers

What is the primary source of government revenue?

<p>Taxes, including income taxes, corporate taxes, sales taxes (like GST/HST/PST), property taxes, and excise taxes.</p>
Signup and view all the answers

Define 'Expenditures' in a government context.

<p>Expenditures refer to government spending on various public services, programs, infrastructure projects, and operational costs.</p>
Signup and view all the answers

List some common examples of individual expenses.

<p>Housing (rent or mortgage), food, transportation, utilities (electricity, water, heat), insurance, taxes, clothing, healthcare, and personal spending.</p>
Signup and view all the answers

List some common examples of business expenses.

<p>Salaries and wages, rent or property costs, raw materials, utilities, marketing and advertising, taxes, insurance, and supplies.</p>
Signup and view all the answers

Provide examples of government expenses at the federal, provincial/state, and municipal/local levels.

<p>Federal: national defense, foreign affairs, telecommunications regulation, employment insurance. Provincial/State: healthcare, education, highways, social services. Municipal/Local: police and fire services, libraries, public transit, waste management, parks and recreation.</p>
Signup and view all the answers

What is a government 'Budget'?

<p>A government budget is a financial plan that outlines the government's expected revenues (income) and proposed expenditures (spending) for a specific period, usually a fiscal year. It reflects the government's spending priorities.</p>
Signup and view all the answers

What is a 'Balanced Budget'?

<p>A balanced budget occurs when a government's total estimated revenues are equal to its total planned expenditures for a specific period.</p>
Signup and view all the answers

What is a budget 'Surplus'?

<p>A budget surplus occurs when a government's revenues exceed its expenditures over a specific period.</p>
Signup and view all the answers

What is a budget 'Deficit'?

<p>A budget deficit occurs when a government's expenditures exceed its revenues over a specific period.</p>
Signup and view all the answers

Provide an alternative definition for 'Deficit' focusing on borrowing.

<p>The deficit represents the total amount of money a government borrows in a single fiscal year to cover the difference between its spending and its income.</p>
Signup and view all the answers

What is 'Currency'?

<p>Currency is the system of money (including coins and paper banknotes) in common use within a specific country.</p>
Signup and view all the answers

Historically, prior to modern fiat systems, what often determined the value of a country's currency?

<p>The value was often determined by the amount of precious metals, typically gold or silver, that the government held in reserve to back the currency (e.g., the Gold Standard).</p>
Signup and view all the answers

In modern economies, what key factors influence the value of a country's currency?

<p>Factors include the country's economic performance (measured by indicators like GDP growth), inflation rates, interest rates set by the central bank, the size of the national debt, political stability, and the currency's exchange rate relative to other major currencies in the foreign exchange market.</p>
Signup and view all the answers

What does GDP stand for and what does it measure?

<p>GDP stands for Gross Domestic Product. It measures the total monetary value of all finished goods and services produced within a country's borders during a specific time period (usually quarterly or annually).</p>
Signup and view all the answers

Define 'Capitalism'.

<p>Capitalism is an economic system characterized by private ownership of the means of production (factories, land, resources), operation for profit, wage labor, and the exchange of goods and services primarily through competitive markets.</p>
Signup and view all the answers

What is a 'Market Economy'?

<p>A market economy is an economic system where decisions regarding investment, production, and distribution are primarily guided by the price signals created by the forces of supply and demand, rather than by government planning.</p>
Signup and view all the answers

What fundamental economic principle governs the pricing structure in a market economy?

<p>Supply and Demand.</p>
Signup and view all the answers

Define 'Supply' in economic terms.

<p>Supply refers to the total amount or availability of a specific good or service that producers are willing and able to offer for sale at different price levels.</p>
Signup and view all the answers

Define 'Demand' in economic terms.

<p>Demand refers to the quantity of a specific good or service that consumers are willing and able to purchase at different price levels; essentially, how badly consumers want it and can afford it.</p>
Signup and view all the answers

What is the 'Business Cycle'?

<p>The business cycle refers to the recurring pattern of fluctuations in economic activity, characterized by periods of economic growth (expansion or boom) followed by periods of economic decline (contraction or recession/bust). These cycles can vary in duration, sometimes suggested to be around 5-6 years.</p>
Signup and view all the answers

What is an economic 'Recession'?

<p>A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is typically visible in decreased real GDP, falling income, reduced employment, lower industrial production, and declining wholesale-retail sales.</p>
Signup and view all the answers

What is an economic 'Boom'?

<p>An economic boom is a period of rapid economic expansion characterized by high GDP growth, increased employment, rising wages, high consumer confidence, and often, asset price inflation.</p>
Signup and view all the answers

What is an economic 'Bust'?

<p>An economic bust is a significant and often rapid downturn in economic activity, usually following a boom period. It is characterized by falling asset prices, bankruptcies, increased unemployment, and reduced production. A severe bust can lead to a recession or depression.</p>
Signup and view all the answers

What economic philosophy was particularly dominant during the 19th century?

<p>Laissez-faire.</p>
Signup and view all the answers

What does the term 'Laissez-faire' mean?

<p>Originating from French, it translates literally to 'let do' or 'let it be'. In economics, it signifies a policy doctrine of minimal government interference in the economic affairs of individuals and society.</p>
Signup and view all the answers

Why was the strict laissez-faire approach generally not restored after World War I?

<p>The massive scale of WWI necessitated unprecedented levels of government intervention and control over national economies (e.g., directing industries, rationing). This experience demonstrated the government's capacity for economic management and created expectations for continued government involvement in addressing complex social and economic issues post-war. This trend towards greater government control has largely continued since.</p>
Signup and view all the answers

Where did the world's primary financial center shift to after World War I?

<p>It shifted from London to New York City.</p>
Signup and view all the answers

Describe the general state of the global economy during the 1920s, prior to the Great Depression.

<p>The 1920s, often called the 'Roaring Twenties', were generally a period of economic prosperity and boom for most industrialized countries, particularly the United States. This boom was fueled by technological innovation, increased industrial production, and rising consumer demand. However, some countries, like Great Britain, experienced less robust growth or faced ongoing economic challenges.</p>
Signup and view all the answers

When did the Great Depression start?

<p>With a stock market crash on October 29th 1929</p>
Signup and view all the answers

What were the effects of the Great Depression?

<p>Massive unemployment, bankruptcies, climatic disasters and widespread poverty</p>
Signup and view all the answers

What came out of the Great Depression?

<p>New attitudes surrounding the poor such as social safety nets and new political parties were introduced</p>
Signup and view all the answers

What country mainly caused the Great Depression?

<p>It was an American made depression</p>
Signup and view all the answers

What were the causes of the Great Depression in Canada?

<p>Overproduction, Reliance on Staple Products, Dependence on America, Stock Market Crash, Tariffs and Debt</p>
Signup and view all the answers

Define Overproduction in the context leading to the Great Depression.

<p>Due to the 20s boom, industries expanded, and companies had more money to spend on production, which caused stockpiling.</p>
Signup and view all the answers

How did Overproduction lead to the Depression?

<p>All the unsold goods caused factories owners to panic and lay off workers who had less money to spend on goods slowing down sales even more.</p>
Signup and view all the answers

Explain Canada's Reliance on Staple Products before the Depression.

<p>Canada depended heavily on the sale of staple products. During the boom there were good harvests; however they had competition from other countries meaning there were large quantities of unsold products and lower prices.</p>
Signup and view all the answers

What were Canada's main Staple Products?

<p>Crops, timber and minerals</p>
Signup and view all the answers

What was the Dust Bowl of the 1930s?

<p>Farmers in the prairies were faced with terrible droughts and very windy conditions that spread dust around and prevented crops from being able to grow.</p>
Signup and view all the answers

How did the Reliance on Staple Products contribute to the Depression in Canada?

<p>Due to competition from other countries with high yields and the dust bowl Canada produced less products that sold for lower prices leading to layoffs and less consumers</p>
Signup and view all the answers

Explain Canada's Dependence on America before the Depression.

<p>Canada relied on staple exports so when countries economies crashed theirs did too. Since 40% of Canada's exports went to America the crash hurt the Canadian economy severely.</p>
Signup and view all the answers

Explain the Stock Market Crash in relation to wheat.

<p>Investors invested in wheat however as its stocks began to lose value investors lost confidence and sold their stocks quickly in large volumes before the stocks prices fell even more. This large value of stock selling made the stocks worthless.</p>
Signup and view all the answers

What did Canadian bankers believe about the economy prior to the crash?

<p>Canada's economy depended upon international wheat trade even though it was indicated wheat prices were falling.</p>
Signup and view all the answers

What is Buying on Margin (or Speculation)?

<p>Buying stock on a loan, hoping the stock would increase and they could sell their shares for a profit and pay off the loan. This process can also be called speculation.</p>
Signup and view all the answers

What is Overextension of Credit?

<p>A loan that is larger than the borrower can repay, growing debt during the 1920s due to consumer confidence</p>
Signup and view all the answers

How did the stock market crash lead to the Great Depression in Canada?

<p>Even though few Canadians owned stocks their companies stocks dropped and their products prices fall leading to many workers being unemployed.</p>
Signup and view all the answers

What is Economic Protectionism and Tariffs, using the USA as an example?

<p>USA had lots of domestic production they did not need to rely on other countries materials they introduced tariffs to protect internal industries. They were a protectionist country.</p>
Signup and view all the answers

What are tariffs?

<p>Duties paid by the consumer on goods entering the country internationally.</p>
Signup and view all the answers

What were the effects of USA's Tariffs on Canada?

<p>Canada lost a major export market as their products were more expensive in America, they needed to impose counter tariffs to protect their own industries restricting trade further.</p>
Signup and view all the answers

How did Debt after WWI contribute to the Depression?

<p>After WWI the US lent money to other nations. In order to pay off their debt Canada relied on selling products to the USA to raise money to repay loans. Because of tariffs international trade was reduced and they lost the ability to pay off loans.</p>
Signup and view all the answers

What is government revenue?

<p>Money collected by the government usually taken through taxes and customs duties</p>
Signup and view all the answers

What constitutes individual revenue?

<p>Salary (annually) or hourly pay rates</p>
Signup and view all the answers

What constitutes business revenue?

<p>Profit from products sold</p>
Signup and view all the answers

What constitutes government revenue?

<p>Taxes</p>
Signup and view all the answers

What are Expenditures in a government context?

<p>Government spending</p>
Signup and view all the answers

Provide examples of Individual Expenses.

<p>Housing, food, insurance, utilities, taxes etc</p>
Signup and view all the answers

Provide examples of Business Expenses.

<p>property, materials, taxes, advertising etc</p>
Signup and view all the answers

Provide examples of Government Expenses at different levels.

<p>federal: defense, telecommunication etc provincial: highways, healthcare, education etc municipal: sewage, libraries, public transit etc</p>
Signup and view all the answers

What is a Budget?

<p>Government spending plan, revenues are totalled and expenditures are announced showing spending priorities</p>
Signup and view all the answers

What is a Balanced Budget?

<p>Where expenditures and revenues are equal, usually before the GD government always balanced their budgets (black)</p>
Signup and view all the answers

What is a Budget Surplus?

<p>A budget where the revenue is greater than the expenditures (in the black)</p>
Signup and view all the answers

What is a Budget Deficit?

<p>Budget shows that expenditures are larger than revenue; the difference between expenditures and revenues is the deficit in the red or in debt</p>
Signup and view all the answers

Provide an alternate definition for Deficit.

<p>Total of borrowed money from the government that year</p>
Signup and view all the answers

What is Currency?

<p>The actual money used by a country.</p>
Signup and view all the answers

What determined a currency's value in the past?

<p>Determined by the amount of gold or silver</p>
Signup and view all the answers

What determines a currency's value in modern times?

<p>Determined by the GDP, size of national debt, interest rates and the value compared to other countries.</p>
Signup and view all the answers

What is GDP?

<p>Gross Domestic Product; the location in the businesses cycle determined by businesses required to report their sales every 3 months.</p>
Signup and view all the answers

What is Capitalism?

<p>An economic system with private production and exchange of goods and services through a network of markets</p>
Signup and view all the answers

What is a Market Economy?

<p>Producers and consumers determines good and services produced and the price of the products</p>
Signup and view all the answers

What is Supply and Demand?

<p>Pricing structure in a market economy</p>
Signup and view all the answers

Define Supply.

<p>Availability of a good or commodity</p>
Signup and view all the answers

Define Demand.

<p>How badly consumers want a good or commodity</p>
Signup and view all the answers

What is the Business Cycle?

<p>A cycle of prosperity and recession every 5 or 6 years, politicians believe this cycle can naturally correct itself.</p>
Signup and view all the answers

What is a Recession?

<p>When economic activity is in decline</p>
Signup and view all the answers

What is a Boom?

<p>Extreme economic prosperity</p>
Signup and view all the answers

What is a Bust?

<p>A serious downturn often following a boom which can lead to a prolonged recession often called a depression</p>
Signup and view all the answers

What was the dominant economic form of the 19th century?

<p>laissez faire</p>
Signup and view all the answers

What does laissez faire mean?

<p>let do, minimal to no government interference in economics</p>
Signup and view all the answers

Why was laissez faire not restored after WWI?

<p>the government needed to exercise more control over social and economics issues, the control has been growing ever since</p>
Signup and view all the answers

Where did the world's finance center move after WWI?

<p>moved from London to New York</p>
Signup and view all the answers

Describe the economy in the twenties.

<p>most countries with some exemptions (Britain) experienced booms in the twenties based on increased consumer demand</p>
Signup and view all the answers

Flashcards

Great Depression Start Date

The Great Depression started with a stock market crash on October 29th, 1929.

Effects of the Great Depression

The Great Depression led to massive unemployment, bankruptcies, climatic disasters, and widespread poverty.

Outcomes of the Great Depression

The Great Depression resulted in new attitudes toward the poor, such as social safety nets and new political parties.

Origin of the Great Depression

The Great Depression was largely an American-made depression.

Signup and view all the flashcards

Causes of Great Depression in Canada

Causes included overproduction, reliance on staple products, dependence on America, the stock market crash, tariffs, and debt.

Signup and view all the flashcards

Overproduction Definition

Due to the 1920s boom, industries expanded, leading to increased production and stockpiling.

Signup and view all the flashcards

Overproduction Effects

Unsold goods caused factory owners to lay off workers, who then had less money to spend, further slowing down sales.

Signup and view all the flashcards

Reliance on Staple Products Definition

Canada relied heavily on the sale of staple products. Competition from other countries led to unsold products and lower prices.

Signup and view all the flashcards

Canadian Staple Products

Canada's staple products included crops, timber, and minerals.

Signup and view all the flashcards

Dust Bowl of the 1930s

Farmers in the prairies faced droughts and windy conditions, making it difficult to grow crops.

Signup and view all the flashcards

Reliance on Staple Products Effect

Competition and the dust bowl led to less production and lower prices, resulting in layoffs and fewer consumers.

Signup and view all the flashcards

Dependence on America Definition

Canada relied on staple exports, so when other countries' economies crashed, so did Canada's. 40% of Canada's exports went to America.

Signup and view all the flashcards

Stock Market Crash Definition

Investors lost confidence and sold their stocks quickly, making the stocks worthless.

Signup and view all the flashcards

Canadian Bankers Belief

Canada's economy depended on international wheat trade, even as wheat prices were falling.

Signup and view all the flashcards

Buying in on a Margin Defintion

Buying stock with borrowed money, hoping to sell shares for a profit and repay the loan.

Signup and view all the flashcards

Overextension of Credit Definition

A loan larger than the borrower can repay, which increased during the 1920s due to consumer confidence.

Signup and view all the flashcards

Impact of Stock Market Crash in Canada

Even though few Canadians owned stocks, their companies' stocks dropped and product prices fell, leading to unemployment.

Signup and view all the flashcards

Economic Protectionism and Tariffs Definition

The USA introduced tariffs to protect internal industries, reducing reliance on other countries' materials.

Signup and view all the flashcards

Tariffs Definition

Duties paid by the consumer on goods entering the country internationally.

Signup and view all the flashcards

Effects of US Tariffs

Canada lost a major export market, and needed to impose counter tariffs to protect their own industries.

Signup and view all the flashcards

Debt after WWI

Canada relied on selling products to the USA to repay loans, but tariffs reduced international trade.

Signup and view all the flashcards

Revenue Definition

Money collected by the government, usually through taxes and customs duties.

Signup and view all the flashcards

Individual Revenue Definition

Salary (annually) or hourly pay rates.

Signup and view all the flashcards

Businesses Revenue Definition

Profit from products sold.

Signup and view all the flashcards

Governments Revenue Definition

Collected from taxes.

Signup and view all the flashcards

Expenditures Definition

Government spending.

Signup and view all the flashcards

Individual Expenses Definition

Housing, food, insurance, utilities, taxes etc.

Signup and view all the flashcards

Businesses Expenses Definition

Property, materials, taxes, advertising etc.

Signup and view all the flashcards

Government Expenses Definition

federal: defense, telecommunication etc provincial: highways, healthcare, education etc municipal: sewage, libraries, public transit etc

Signup and view all the flashcards

Budget Definition

Government spending plan, revenues are totalled and expenditures are announced showing spending priorities

Signup and view all the flashcards

Balanced Budget Definition

Where expenditures and revenues are equal, usually before the GD government always balanced their budgets (black)

Signup and view all the flashcards

Surplus Definition

A budget where the revenue is greater than the expenditures (in the black)

Signup and view all the flashcards

Deficit Definition

Budget shows that expenditures are larger than revenue; the difference between expenditures and revenues is the deficit in the red or in debt

Signup and view all the flashcards

Deficit Definition(Alt)

Total of borrowed money from the government that year

Signup and view all the flashcards

Currency Definition

The actually money used by a country.

Signup and view all the flashcards

What determined a currencies value in the olden times?

Determined by the amount of gold or silver

Signup and view all the flashcards

What determines a currencies value in modern times?

Determined by the GDP, size of national debt, interest rates an the value compared to other countries.

Signup and view all the flashcards

GDP Definition

Gross domestic policy, the location in the businesses cycle determined by businesses required to report their sales every 3 months,

Signup and view all the flashcards

Capitalism Definition

An economic system with private production and exchange of goods and services through a network of markets

Signup and view all the flashcards

Market Economy Definition

Producers and consumers determines good and services produced and the price of the products

Signup and view all the flashcards

Supply and Demand Definition

Pricing structure in a market economy

Signup and view all the flashcards

Supply Defintion

Availability of a good or commoditity

Signup and view all the flashcards

Demand

How badly consumers want a good or commoditity

Signup and view all the flashcards

Business Cycle Definition

A cycle of prosperity and recession every 5 or 6 years, politicians believe this cycle can naturally correct itself.

Signup and view all the flashcards

Recession Definition

When economic activity is in decline

Signup and view all the flashcards

Boom Definition

Extreme economic prosperity

Signup and view all the flashcards

Bust Definition

A serious downturn often following a boom which can lead to a prolonged recession often called a depression

Signup and view all the flashcards

economic form of the 19th century

lassiez faire

Signup and view all the flashcards

lassiez faire Defition

let do, minimal to no government interference in economics

Signup and view all the flashcards

why was lassiez faire not restored after WWI?

the government needed to exercise more control over social and economics issues, the control has been growing ever since

Signup and view all the flashcards

finance center after WWI

moved from London to New York

Signup and view all the flashcards

economy in the twenties

most countries with some exemptions (Britain) experienced booms in the twenties based on increased consumer demand

Signup and view all the flashcards

Study Notes

  • The Great Depression started with the stock market crash on October 29, 1929.
  • It caused massive unemployment, bankruptcies, climatic disasters, and widespread poverty.
  • New attitudes surrounding the poor, social safety nets, and new political parties emerged as a result.
  • The Great Depression was largely an American-made event.

Causes of the Great Depression in Canada:

  • Overproduction
  • Reliance on Staple Products
  • Dependence on America
  • Stock Market Crash
  • Tariffs
  • Debt

Overproduction:

  • Industries expanded due to the 1920s boom, leading to increased production and stockpiling.
  • Unsold goods caused factory owners to lay off workers, leading to decreased spending and further slowing sales.

Reliance on Staple Products:

  • Canada depended on the sale of staple products (crops, timber, and minerals).
  • Competition from other countries and the Dust Bowl led to unsold products, lower prices, layoffs, and fewer consumers.
  • The Dust Bowl of the 1930s involved terrible droughts and windy conditions in the prairies, preventing crop growth.

Dependence on America:

  • Canada relied on staple exports; the crash of other countries' economies impacted Canada.
  • 40% of Canada's exports went to America, so the American crash severely hurt the Canadian economy.

Stock Market Crash:

  • Investors in wheat lost confidence as stocks lost value, selling stocks quickly and making stocks worthless.
  • Canadian bankers believed the economy depended on international wheat trade, even with falling wheat prices.
  • Buying on margin (speculation): buying stock on a loan, hoping to profit and repay the loan.
  • Overextension of credit: loans larger than the borrower can repay, fueled by consumer confidence in the 1920s.
  • Few Canadians owned stocks, but company stocks dropped, product prices fell, and many workers became unemployed.

Economic Protectionism and Tariffs:

  • The USA prioritized domestic production and introduced tariffs to protect internal industries (protectionist country).
  • Tariffs are duties paid by the consumer on goods entering the country internationally.
  • Canada lost a major export market due to US tariffs and imposed counter tariffs, restricting trade further.

Debt after WWI:

  • The US lent money to other nations after WWI.
  • Canada relied on selling products to the USA to repay loans which was impacted due to tariffs reducing international trade

Economic Terms

  • Revenue: Money collected by the government, usually through taxes and customs duties.
    • Individual Revenue: Salary (annually) or hourly pay rates.
    • Businesses Revenue: Profit from products sold.
    • Governments Revenue: Taxes.
  • Expenditures: Government spending.
    • Individual Expenses: Housing, food, insurance, utilities, taxes, etc.
    • Businesses Expenses: Property, materials, taxes, advertising, etc.
    • Government Expenses:
      • Federal: Defense, telecommunication, etc.
      • Provincial: Highways, healthcare, education, etc.
      • Municipal: Sewage, libraries, public transit, etc.
  • Budget: Government spending plan with revenue totals and expenditure announcements, showing spending priorities.
    • Balanced budget: Expenditures and revenues are equal. Before the Great Depression, governments always balanced their budgets.
    • Surplus: Revenue is greater than expenditures.
    • Deficit: Expenditures are larger than revenue; the difference is the deficit. It is also the total of borrowed money from the government that year.

Currency Value

  • Currency: The actual money used by a country.
  • Value was determined by the amount of gold or silver in the past
  • Value is determined by GDP, national debt size, interest rates, and comparison to other countries in modern times

GDP

  • Gross Domestic Product,
  • Businesses report required to report their sales every 3 months
  • Location in the businesses cycle determined

Economic Systems:

  • Capitalism: An economic system with private production and exchange of goods and services through a network of markets.
  • Market Economy: Producers and consumers determine goods and services produced and their prices.
  • Supply and Demand: Pricing structure in a market economy.
    • Supply: Availability of a good or commodity.
    • Demand: How badly consumers want a good or commodity.

Business Cycle:

  • A cycle of prosperity and recession every 5 or 6 years.
  • Politicians believed it could naturally correct itself.
    • Recession: Economic activity is in decline.
    • Boom: Extreme economic prosperity.
    • Bust: A serious downturn following a boom, leading to a prolonged recession (depression).

Laissez-faire:

  • Economic form of the 19th century meaning "let do" with minimal to no government interference in economics.
  • It was not restored after WWI because the government needed more control over social and economic issues, and control has been growing ever since.

Post-WWI Economy:

  • The finance center moved from London to New York.
  • Most countries experienced booms in the 1920s based on increased consumer demand (with some exceptions like Britain).

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Use Quizgecko on...
Open
Browser
Browser