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1.4 IMPACT OF ECONOMIC CHANGE 1917-80, fords-assembly-line-turns-100-02…
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In 1929 people who wanted consumer goods had already bought them which led to a contraction in demand. This caused goods to pile up in workhouses.
Businesses started to lay off workers and the Government did nothing. Businesses and Banks were both in debt.
The Fed tried to control this by tightening the money supply.
In September shares were seen as dangerously high which caused investors to start selling this encouraged other people to panic sell shares and media caused panic.
Consequently, it turned into a bear market and the stock exchange eventually closed.(BLACK MONDAY)
-Wall Street Crash worsened the depression as businesses going bankrupt meant that people lost their jobs and the housing market failed.
-The bank also failed as people could not pay loans back.
-Hoover tried to push federal actions but it was opposed by republicans in congress.
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Roosevelt closed all the banks and had the FED inspect them and reopen when they were fit for purpose. He also used federal agencies to increase employment.
However, natural disasters hampered recovery as the Great Plains became dustbowls and the New Deal put the government into a deficit.
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