The Great Depression

Crash of 1929

• October 24th, 1929, also known as Black Thursday
• investors sold their shares in response to the prediction of a global economic slowdown
• stocks plummetted and the stock market crashed- investors lost a significant amount of money
• Businesses also negatively affected- decrease in wage, employment, and sales
• Less profit from fewer sales led to decreased production, more layoffs, and lower wages

Families

• Fewer jobs- affected men and women -more on the men- (businesses could not afford to hire as many people)
• Lower wages- businesses could not afford to pay as much to their workers
• Unemployment rose to approximately 25% at the peak in 1933
• Shantytowns had dilapidated housing built by the homeless, who used scraps, like cardboard, for construction
• People who lived in shantytowns were poor, unemployed, and homeless

The New Deal

• Farm programs- lowered farming output (reduced surplus) to increase food prices
• Ex. Agriculture Adjustment Administration (AAA)
• Public Works programs- created jobs in construction and maintainence of infrastructure
• Ex. Works Progress Administration (WPA)
• Government projects and greater income opportunities created more jobs

Keynesian Economics

• Problem: insufficient demand, not excessive supply
• encouraged government intervention
• redistribute income- give greater purchasing power
• establish public works projects- provide more jobs
• increase money supply- promote investment