AP European History AMSCO Guided Notes

8.5: Global Economic Crisis

AP European History
AMSCO Guided Notes

AP European History Guided Notes

AMSCO 8.5 - Global Economic Crisis

Essential Questions

  1. What were the causes and effects of the global economic crisis of the 1920s and 1930s?
I. Worldwide Economic Weaknesses

1. What is the gold standard and how did it limit countries' ability to respond to economic problems?

A. Overproduction

1. How did overproduction after World War I contribute to economic weakness in Europe?

2. What financial problems did farmers and businesses face when they had to cut back production?

B. Tariffs and Trade

1. How did tariff policies in the mid-1920s affect international trade and European economies?

2. Why did countries with war-damaged infrastructure, such as Belgium, lose trade advantages to the United States?

C. Speculation

1. What is speculation and how did buying on margin contribute to inflated stock prices in the 1920s?

2. How did the gap between stock prices and actual company values reveal underlying economic weakness?

D. Financial Collapse

1. How did the Dawes Plan initially help European economies, and what role did American investment play?

2. What caused investors to pull their money out of the stock market in 1929, and what were the consequences for Europe?

3. How did the collapse of major banks in Germany and central Europe affect trade, industry, and employment?

II. Attempts to Overcome the Great Depression

A. Rethinking Economic Theories and Policies

1. What was the traditional government response to economic depression, and why did it fail during the Great Depression?

2. What new economic approach did John Maynard Keynes propose, and how did it differ from traditional policies?

3. Why did Britain's decision to go off the gold standard in 1931 produce better results than traditional policies?

B. Forging Political Alliances

1. Why did European governments form coalition governments during the Great Depression, and what was the British national government of 1931?

2. What was the French Popular Front and what policies did it introduce to address the Depression?

3. How did Scandinavian countries successfully address the Great Depression through cooperation between capitalists and socialists?

C. German Extremism

1. Why did Germany suffer more severely from the Great Depression than other European nations?

2. How did the economic crisis and mass unemployment in Germany create conditions for Hitler's Nazi Party to gain power?

Key Terms

Great Depression

gold standard

depreciate

speculation

John Maynard Keynes

national government

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