Chapter 21, Section 1, The Great Crash, p. 672-679 Key Terms ...

Chapter 21, Section 1, The Great Crash, p. 672-679
Key Terms & People
*Gross national product
*Herbert Hoover
*Buying on margin
*Federal Reserve System
*Black Tuesday
Questions from the reading:
1.What effect did America’s mood have on individuals’ financial decisions?
2.Defend the widespread American investment in stock in the 1920s.
3.What economic factors and conditions made the American economy appear prosperous in the
1920s?

4.What were the basic economic weaknesses in the American economy in the late 1920s?
5.What events led to the stock market crash of October 1929?
6.Why is it significant that much of the nation’s wealth was owned by a small number of people?
7.How might the lack of available credit hurt the nation’s economy in the 1930s?
8.What were the effects of the crash on the economy of the U.S. and the world?
9.Describe how the drop in the stock market brought ruin to so many investors.
10.Why would an investor who had not brought stocks on margin have been in a better position to
survive the crash than one who had?
11.How did the crash affect individual investors, brokers, and banks?
12.Why did the stock market crash have such a powerful impact on the national economy?
13.Defend Hoover’s belief that the economy would soon recover.