The Wall Street Bubble and the Great Depression
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Questions and Answers

What factor contributed to banks overextending business and personal loans during the Wall Street bubble of 1927-29?

  • A shortage of money supply
  • Strict regulations on lending practices
  • Reduced demand for loans
  • Lack of regulation and easy access to money (correct)
  • During the Wall Street bubble of 1927-29, how did speculators attract new participants into the stock market?

  • By offering low-risk investment opportunities
  • By discouraging participation from new investors
  • By drawing in new, often inexperienced, participants (correct)
  • By advising caution and conservative investment strategies
  • What action did the Federal Reserve take in October 1929 in response to the Wall Street crash?

  • Implemented quantitative easing measures
  • Introduced strict lending policies
  • Lowered interest rates to boost economic activity
  • Increased rates to 6% (correct)
  • What was a consequence of the Smoot-Hawley Tariff introduced in 1930 in the United States?

    <p>Led to a rise in protectionist measures</p> Signup and view all the answers

    How did Germany respond to the banking crisis of summer 1931?

    <p>Imposed capital controls</p> Signup and view all the answers

    What approach did Treasury Secretary Andrew Mellon advocate for during the 1930s economic crisis in the United States?

    <p>&quot;Purge the rottenness&quot; and raise taxes with the Revenue Act of 1932</p> Signup and view all the answers

    What was the primary action taken by the Bank of France around 1927 in response to the Wall Street bubble?

    <p>Hoarding gold reserves</p> Signup and view all the answers

    In response to the 1930s economic crisis, how did the United States Treasury Secretary Andrew Mellon propose to deal with it?

    <p>Increasing taxes through the Revenue Act of 1932</p> Signup and view all the answers

    What was a significant outcome of Britain suspending the gold standard in response to the banking crisis of summer 1931?

    <p>Stabilizing the banking sector</p> Signup and view all the answers

    What major policy did Germany implement in 1932 under Chancellor Heinrich Brüning during the economic crisis?

    <p>Implementing belt-tightening measures</p> Signup and view all the answers

    How did mass unemployment impact other sectors during the cascading downward spiral of 1929-32?

    <p>Led to a retail sector collapse</p> Signup and view all the answers

    What approach did Herbert Hoover adopt towards economic challenges, leading to criticisms and the creation of 'Hoovervilles'?

    <p>'Purging the rottenness' by increasing taxes</p> Signup and view all the answers

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