Quiz: THE GREAT DEPRESSION PART 1 — 14 domande

1. What happened on Black Thursday in the 1929 stock market crash?

A. Selling accelerated and prices collapsed as millions of shares were dumped

B. The market reopened with strict controls after a temporary suspension

C. The collapse was complete and the economy’s downfall was finished

D. Bank deposits were frozen to stop investors from withdrawing cash

Answer: (A)

Spiegazione

Black Thursday was the first major day of the crash, when selling intensified and prices plummeted. The complete collapse is associated with Black Tuesday, not Black Thursday.

2. Which event is identified as Black Tuesday in the 1929 crash?

A. 24 October 1929, when 12.8 million shares were sold

B. 29 October 1929, when 16 million shares were sold at a fraction of their price

C. The day investors first began buying shares on margin

D. The day the government introduced bank regulation

Answer: (B)

Spiegazione

Black Tuesday was 29 October 1929, when 16 million shares were sold and the collapse became complete. The 24 October date belongs to Black Thursday.

3. What does buying on margin mean?

A. Buying stock with a loan for part of the purchase price

B. Pooling savings in a bank to earn interest

C. Buying stock by paying the full price in cash

D. Selling stock quickly to avoid losses

Answer: (A)

Spiegazione

Buying on margin means the buyer pays only a small part of the price and borrows the rest. This made investors vulnerable when prices stopped rising.

4. Why did many margin buyers go broke when stock prices fell?

A. They had to pay extra tariffs on every share they owned

B. They could not repay the money they had borrowed to buy shares

C. They were forced to sell their houses to cover taxes

D. They lost access to all bank deposits because banks were nationalized

Answer: (B)

Spiegazione

Margin buyers expected rising prices to cover their loans, but falling prices meant they could not repay. That left many of them financially ruined.

5. How did overproduction contribute to the economic downturn?

A. It reduced factory output so sharply that shortages raised prices

B. It eliminated competition between farmers and manufacturers

C. It increased demand faster than supply could keep up

D. It caused too many goods to be available, which pushed prices down

Answer: (D)

Spiegazione

Overproduction meant more goods were produced than could be sold, which lowered prices and weakened demand. Farmers were especially hurt by falling agricultural prices and debt.

6. What was one effect of protectionism on the American economy?

A. It ended the need for trade between countries

B. It guaranteed higher farm incomes by raising exports

C. It encouraged Europe to impose tariffs on American goods

D. It made foreign goods easier to buy in American markets

Answer: (C)

Spiegazione

Protectionist policies helped trigger retaliatory tariffs, which reduced trade and made American goods too expensive abroad. The Fordney-McCumber Tariff Act is linked to this cycle.

7. How did laissez-faire banking worsen the economic crisis?

A. It left banks weakly regulated and vulnerable to panic withdrawals

B. It created strict safeguards for banks and markets

C. It prevented people from borrowing money to buy goods

D. It forced all banks to merge into a single national system

Answer: (A)

Spiegazione

Laissez-faire meant minimal government interference, so banks lacked strong safeguards and many small banks were unstable. When panic hit, they could not handle the rush for money.

8. Which debt-related development added to financial instability before and during the crash?

A. Farmers stopped using mortgages because all loans were cancelled

B. More Americans bought goods on hire purchase and some house values fell after 1926

C. Banks stopped lending to shops, which eliminated consumer credit

D. Wages rose quickly, making debt repayment easier for most families

Answer: (B)

Spiegazione

Many consumers bought on hire purchase, while falling house prices after 1926 left some owners owing more than their homes were worth. Both trends increased financial strain.

9. What happened to unemployment between 1929 and 1933?

A. It fell from 14 million to 1.6 million

B. It dropped because wage cuts created more jobs

C. It stayed close to 3% throughout the period

D. It rose from 1.6 million to 14 million

Answer: (D)

Spiegazione

Unemployment surged from 1.6 million in 1929 to 14 million in 1933. That was a rise from about 3% to 25% of the workforce.

10. Which hardship is directly linked to the immediate effects of the Depression?

A. In 1931, all workers received unemployment benefits from the city

B. In 1931, factories expanded wages because labor was scarce

C. In 1931, food prices rose so sharply that shortages disappeared

D. In 1931, about 100 people died directly of starvation in New York hospitals

Answer: (D)

Spiegazione

The Depression led to severe hardship, including starvation; about 100 people died directly of starvation in New York hospitals in 1931. This reflects the scale of the crisis.

11. What often happened to people who could not pay their mortgage or rent during the Depression?

A. They were evicted and often ended up sleeping outdoors

B. They were exempted from all payments until recovery

C. They were given permanent housing by city councils

D. They were moved into factory-owned apartments

Answer: (A)

Spiegazione

People who fell behind on mortgage or rent payments were evicted, and many had to sleep outdoors. Homelessness rose sharply as a result.

12. What were Hoovervilles?

A. Shanty towns of very poor housing on the edges of cities

B. Government-built housing estates for unemployed workers

C. Temporary soup kitchens run by charities

D. Banks that had failed during the stock market crash

Answer: (A)

Spiegazione

Hoovervilles were makeshift settlements of poor housing, often built from cardboard or corrugated iron. They were located on the edges of cities and lacked facilities.

13. How did relief schemes work when the United States had no unemployment benefits?

A. They replaced all private charities with federal welfare checks

B. They were funded entirely by stock market investors

C. They were paid for by tariff revenue collected from Europe

D. They relied on local taxes to provide temporary homes, food, and clothing

Answer: (D)

Spiegazione

Without unemployment benefits, towns and cities depended on local taxes to support relief schemes such as temporary homes, food, and clothing. These schemes weakened as unemployment rose and tax income fell.

14. What role did soup kitchens play during the Depression?

A. They stored grain so farmers could avoid overproduction

B. They provided free or cheap food, often run by charities or wealthy donors

C. They were places where workers were hired for federal public works

D. They offered mortgage loans to families at low interest

Answer: (B)

Spiegazione

Soup kitchens gave hungry people free or very cheap meals, often through voluntary, religious, or wealthy supporters. They were a key form of emergency relief during the Depression.