chapter 23

Question 1

What events occurred between 1929 and 1932

Answer 1

1. U.S gross domestic product fell by 50% (from 103.1 to 58 billion)
2. Consumption dropped 18%.
3. Construction dropped 78%.
4. Private investment dropped 88%.
5. 9,000 banks closed and 100,000 businesses failed
6. Corporate profits fell from $10 billion to $1 billion.
7. Unemployment rose to 25% and 15 million people were unemployed by 1933

Question 2

How did WW1 make depression recovery difficult

Answer 2

1. Britain’s central bank was in no position to resume its traditional role in managing the international financial system
2. War disrupted the international gold standard as the system was vulnerable during economic downturns, when large financiers withdrew investments and demanded gold payments. it was largely inflexible