KEY TERMS Key Terms and People to Know for the Regents Exam
Overproduction
One cause of the Great Depression was overproduction of goods (and underconsumption of those goods by consumers). Businesses produced more than people could buy, which lowered prices and made it harder to make a profit.
Income Inequality
Another cause of the Great Depression was the uneven distribution of wealth between the rich and poor. Most of the wealth was concentrated in a few hands, which meant that there were not enough consumers to keep the economy going strong.
Stock Market Crash
Another cause of the Great Depression was speculation in the stock market and excessive buying of stocks on margin (with borrowed money). When the market bubble crashed (the value of the stocks dropped), people lost enormous amounts of money.
Bank Runs
Another cause of the Great Depression was a banking panic, during which thousands of people withdrew their money from the banks (they feared that the banks would fail and they would lose their $). This hurt the economy by making loans harder to get.
Great Depression
A worldwide economic crisis that started in the US. Banks failed, business closed, millions of people lost their jobs and homes. Many people were forced to travel the country looking for work.