Examine Notes: The fantastic Depression
Exam 4 review
Chapters 23, 24, and twenty in Walton and Rockoff. Notes including a chapter (Chapter 20) we would not cover in class. The queries below can help you study the fabric in that phase and be able to prepare you for your last exam.
two Articles by Alexander Discipline: " Economic Growth and Recover in the us 1919-1941, вЂќ and " The Most Technologically Progressive 10 years of the Hundred years. вЂќ
The Brad Delong article: " The Great Major depression from the Perspective of Today, and Today from the Perspective of the 1930s. вЂќ Inquiries from Chapter 23.
1 . Refer to 4 economical statistics that indicate how terrible the truly great Depression was. a. True GDP Chop down 30%
b. Price level falls 27%
c. Jobless rises from 3% -- 25%
m. Durable gods output droped 34%
2 . Walton and Rockoff note there are 3 key queries students of economic history wish to keep in mind once we think about the Great Depression. What are those key inquiries? For each problem, provide 2 answers offered by modern scholarship. Be sure to cite one of your two answers for each and every question. So , for example , to get question 1, you might say " Romer (1990) argued buys of consumer durables, which will reflect buyer confidence and are also often bought on credit rating, declined considerably. вЂќ You can even cite the lecture notes, as in Owens (2103) or Delong's article Delong (2013. a. What caused the Great Major depression?
i. Stock exchange Crash of 1929. Destroys 79% of market value and excessive optimism for the future of the economy. ii. Friedman and Schwartz (1963) вЂ“ Decline in stock of money manufactured by the disengagement of forex from financial system plus the decisions with the banks to keep more supplies. b. Why Depressed to get so long?
i. Owens (2013) Countries stayed at on the Precious metal standard to long (not until 1933). Fed cannot alter funds supply and deflation remained. ii. Decrease in consumer purchases of consumer durables (goods with life > 3 years) 1 . Paradoxon of Thrift ( In Savings Salary Savings)
c. How can we avoid another one?
my spouse and i. Owens (2013) - Formation of SECURITIES AND EXCHANGE COMMISSION'S in 1934 allows governing body above stock market (fall was main reason for depression); along with supervision of securities can easily prevent marketplace crash ii. Managing in the money supply by Government Reserve simply by switching coming from Gold Common in 1933.
3. For what reason was the failure of the Lender of the United States in New York вЂ“ a private lender вЂ“ specifically disruptive. a. Largest Failure up to that time in terms of deposits
b. Lender was in Nyc, receiving much publicity
c. " United StatesвЂќ in the name acquaintances the non-public bank with all the government. Open public associated private bank as government traditional bank and thus government was failing as well.
some. What is the Bagehot guideline, and so why did the Federal Hold not abide by it at the stat of the Great Depression? Central banks will need to lend openly at large rates during financial crisis' Fed would not follow because though banking companies were terribly managed, and once these banking institutions failed the machine would are more efficient.
a few. What three actions truly does Roosevelt consider that end the financial crisis? Report two figures which reflect the magnitude of this change (statistics that compare financial failures. ) a. Declares a вЂbank holiday', concluding all banking companies for a week b. Needs everyone to choose in their Platinum to the FED
c. FDIC Insurance in 1933
Stats вЂ“ Bank failures truly feel from some, 000 in 1933 to 61 in вЂ34 On average about 336 bank failures/year in 1920's
6. What other three reasons behind the Great Depression do Walton and Rockoff note had been considered, although not confirmed by modern scholarship or grant as almost certainly causes of the Great Depression. Clarify how one of these could have written for the Great Major depression. a. Growing income inequality
i. With additional money in hands of top 10% possibly even in economic climate, as they shed nearly all their money in market those with almost no money to get buy were...