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If the Great Depression happened today, whatdo you think would be the first cost cuts youand your family would make? Which cuts

would have the strongest impact on your life?

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The United States economy enters a recession.People began to spend less money, so therewere more unsold goods on the shelves. This

slowed down the production of new goods.Wowie Econ Intro

http://www.youtube.com/watch?v=L1AwoKZECTA&fb_source=messagehttp://www.youtube.com/watch?v=L1AwoKZECTA&fb_source=messagehttp://www.youtube.com/watch?v=L1AwoKZECTA&fb_source=messagehttp://www.youtube.com/watch?v=L1AwoKZECTA&fb_source=message

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There are several reasons why the GreatDepression occurred. Can you think of any?

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Black TuesdayOctober 29, 1929

The most devastating stock market crash in UnitedStates history.

On Black Tuesday, the stock market DowJones Industrial Average went down 23%The Stock Market Crash 1929

http://www.youtube.com/watch?v=Q9fh4aTcOLghttp://www.youtube.com/watch?v=Q9fh4aTcOLg

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People began to lose faith in the Americancapitalist economic system

Taking money out of the stock market

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People were beginning to cut back on theirspending.Companies were still producing the same

amount of products, but were selling lessIn order to sell their products, companieshad to lower the prices, causing them to

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Where do you see producers making too muchof a good with not enough people buying it?

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Banks invested money into the stock marketWhen the stock market crashed, people fledto the banks to get their money

The banks did not have their customersmoney because they lost it in the stockmarket.

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Investors borrowed money from banks toinvest in the stock marketThe stock market crashed

People fled to banks to get their money outof their accountsThe banks, who were also investing money inthe stock market, lost all their money andcould not give any to customersThe banks still expected customers withloans to pay their debt.

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Dust BowlAmerican Economic Policies in Europe(tariffs)

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Banks failedHigh rollers in the stock market were

bankrupted

Over 9 million people lost all their savings

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EFFECT:People begin to economize and cut back on

their spending.

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EFFECT:Demand for goods decreased.Businesses began to cut costs too, and laid off

workers.

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During the first 4 years of the depression 6,000 banks went out of business9 million savings accounts vanished

85,000 businesses went bankrupt13 million people were unemployed400,000 farms were repossessed by banks2,600 schools were closed

Admissions to state mental institutions went up300%2 million people became homelessSuicide rates went up by 30%

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You are an immigrant from Romania who movedto the United States in 1928. A new life in

America seemed very promising to you and yourefforts to support your family of a wife/husbandand two children. You took on a job working in afactory. On October 29, 1929, the stock marketcrashed, and you lost your job shortly after. Inthe space below, write a letter to your family

back in Romania explaining to them your feelingsand the situation you are in. What do you donow? How has the depression changed your

everyday life? (Challenge: Try to make speechesemotional)