key term - Great Depression

Definition

The Great Depression was a severe worldwide economic downturn that lasted from 1929 to the late 1930s, marked by a dramatic decline in industrial production, mass unemployment, and widespread poverty. It reshaped the American economy and society, leading to significant changes in government policies and international relations.

5 Must Know Facts For Your Next Test

1. The Great Depression began with the stock market crash on October 29, 1929, known as Black Tuesday, leading to a massive loss of wealth and confidence in the economy.
2. Unemployment reached its peak at around 25% in the United States during the early 1930s, severely affecting families and communities across the nation.
3. The Great Depression prompted the government to take a more active role in the economy, setting a precedent for future federal intervention through programs like Social Security.
4. Internationally, the Great Depression led to trade wars as countries implemented tariffs to protect their economies, which further deepened global economic struggles.
5. The era also saw significant cultural shifts, with artists and writers capturing the struggles of everyday Americans through various forms of media, highlighting themes of resilience and hardship.

Review Questions

• How did the Stock Market Crash of 1929 directly contribute to the onset of the Great Depression?
  • The Stock Market Crash of 1929 set off a chain reaction that directly led to the Great Depression by eroding consumer confidence and creating panic among investors. As stock prices plummeted, individuals and businesses lost significant wealth, leading to reduced spending and investment. This decline in economic activity resulted in widespread layoffs and business closures, which further compounded the economic downturn.
• In what ways did the New Deal address the challenges posed by the Great Depression and reshape American society?
  • The New Deal introduced a variety of programs designed to provide relief to those suffering from poverty and unemployment during the Great Depression. Programs such as Social Security and unemployment insurance established a safety net for citizens, while initiatives like public works projects created jobs and revitalized infrastructure. These changes not only aimed to recover the economy but also altered public expectations regarding government responsibility in economic affairs.
• Evaluate how the Great Depression influenced interwar foreign policy and shaped international relations during that period.
  • The Great Depression significantly influenced interwar foreign policy by leading nations to adopt more isolationist stances as they focused on domestic recovery. Countries struggled with high unemployment rates and economic instability, which resulted in decreased international trade and cooperation. This shift contributed to rising tensions globally, as nations turned inward rather than collaborating on economic solutions. Ultimately, these dynamics laid groundwork for future conflicts, including World War II.

Related terms

Stock Market Crash of 1929:

The rapid decline in stock prices that occurred in late October 1929, which is often cited as the primary catalyst for the Great Depression.

New Deal:

A series of programs and reforms introduced by President Franklin D. Roosevelt aimed at providing relief, recovery, and reform to combat the effects of the Great Depression.

Dust Bowl:

A severe drought in the 1930s that greatly affected agricultural production in the Great Plains, exacerbating the economic challenges of the Great Depression.