Chapter 17 Section 1
“The Stock Market Crash” of 1929
1. How did President Hoover’s philosophy affect his economic policy?
His policy was a laissez faire government, which meant that the government would take a hands off approach and stay out of the way of affairs. Also, to use economic policy to banish poverty/government should help people to help themselves/ “Government should be the umpire in financial markets but should work to conserve natural resources, conduct scientific research and flood control.”
2. Explain the 4 major causes of the war.
1. The rise of consumer credit: the rise of installment plans
- widespread loss of confidence leads to the crash. Perceived value vs. real value.
2. Playing the stock market becomes a nation wide past time – stock prices go up
3. Illegal Manipulation of stock values (also buying stock on margin)
4. Government’s hands off policy toward business corruption
overproduction/under consumption/agricultural slump+ surplus/ Tax/ Tariff- tax on imported goods/hands off
*High taxes inhibits business production, consumer spending, which limits the $$ they could be putting into their business
* During the great depression taxes and tariffs remained high
Europe is still recovering from WW1 which hurt American Trade.
UNKNOWN
Speculator
ny stock exchange
