DTW GED PREP

The Great Depression, which began with the stock market crash in October 1929, was the most severe and prolonged economic downturn in U.S. history. The crash itself was triggered by the practice of margin buying, where investors borrowed money to purchase stocks, betting on their value rising. This practice was widespread during the 1920s, creating an unstable and speculative market. The value of stocks was artificially inflated, with investors hoping to sell them for a profit as prices went up. However, when the market began to falter and prices dropped, panic set in. As people rushed to sell their stocks, they faced mounting debts, which they could not repay. This led to a chain reaction: banks that had loaned money to stock buyers failed because the loans were unpaid, and people lost all their savings since there were no protections in place for bank deposits. The financial instability caused widespread business closures and mass layoffs. Workers were left unemployed, and many people lost their homes due to unpaid mortgages. The effects of the Depression were felt across all social and economic classes.

The crisis was further exacerbated by a devastating drought in the Great Plains, turning the region into the Dust Bowl. The combination of dry weather and poor farming practices led to severe dust storms, stripping away the topsoil and causing crop failures. Thousands of farmers, especially from Oklahoma and neighboring states, lost their livelihoods and became known as “Okies.” They migrated westward, primarily to California, in search of work and a better life. However, they found little relief, as they faced hostility, discrimination, and exploitation with low wages.

President Herbert Hoover, who was in office when the Depression began, faced widespread criticism for his handling of the crisis. Many Americans believed he had failed to predict or adequately respond to the economic collapse. His inability to resolve the crisis led to the formation of “Hoovervilles,” makeshift shantytowns named mockingly after him, where the homeless gathered. In the 1932 presidential election, Hoover was decisively defeated by Franklin Delano Roosevelt, who promised a new approach to tackling the Depression.

Upon taking office, Roosevelt quickly implemented his New Deal programs, which aimed to provide immediate relief, create jobs, and reform the banking system. These programs helped restore public confidence, stabilize the banking system, and reduce unemployment. During Roosevelt’s first term, the unemployment rate dropped by about 8%, signaling progress. His actions helped to reshape the role of the federal government in addressing economic issues. Roosevelt’s leadership during this difficult period resonated with the American people, and he was reelected in 1936 with the largest electoral victory in over a century. His New Deal marked a turning point in American politics and policy, solidifying his legacy as a president who guided the nation through its darkest economic period.

THE GREAT DEPRESSION

 Directions: Choose the best answer to each of the following questions.

 1.  Which statement is supported by the preceding text?

 A.   The Great Plains was the region least affected by the Great

 Depression.

 B.   Proper farming techniques are essential to maintaining healthy

 soil.

 C.   Immigrants from New York and California settled in the Dust

 Bowl area in the 1930s.

 D.   In the Great Plains in the 1930s, crops failed because of drought

 and dust storms.

 Question 2 is based on the following graph:

.  According to the graph, the unemployment percentage in the United

 States reached a peak of 21% in

 A.   1924.

 B.   1934.

 C.   1941.

 D.   1949.

1. Correct Answer: ✅ D. In the Great Plains in the 1930s, crops failed because of drought and dust storms.
Explanation: This statement reflects the historical impact of the Dust Bowl during the Great Depression, where severe drought and dust storms devastated the Great Plains, leading to widespread crop failure and displacement of farming families.

2. Correct Answer: ✅ B. 1934
Explanation: According to the graph (not shown here but referenced), unemployment peaked at 21% in 1934 during the height of the Great Depression, before gradually declining due to New Deal programs and economic recovery efforts.