The Crash Occurs and the Great Depression Begins

1. What industrial weakness signaled a declining economy in the 1920s?        
The weakness that signaled a declining economy in the 1920's was the use of credit in an ordinary persons life. It created superficial property in the country and when people were supposed to pay back their debts they couldn't which cause banks to either close or fail. It basically sent the United States into a tailspin downwards.  

2. What did the experience of farmers and consumers at this time suggest about the health of the economy?       

The experience of farmers and consumers at this time suggested that the economy was not doing so well. Farmers had taken out so many loans to get more crops and new machinery that they could pay it back. They couldn't pay it back because the price for the crops had gone down by 40 percent and they weren't able to sell their goods because their were so many other farmers trying to do that. Consumers couldn't buy the goods because they didn't have to money to do so. Prices had risen so much that the consumers just couldn't afford to buy so many products. 

3. How did speculation and margin buying cause stock prices to rise?      
Speculation played a role in stock prices rising because people would buy them in hope to get gain a quick profit but they didn't pay attention to the risks involved in doing so. People thought that the stocks would do well so the prices would go up for them but when they didn't people would want to sell them right away, which started mass selling's of stocks. When people began buying in margin people had to start to raise the prices on the stocks because they weren't being payed the full amount of the stock and they had to make some kind of profit on it. Also because people weren't paying back the full amount the owned the stock owner.  

4. What happened to ordinary workers during the Great Depression?      
During the Great Depression ordinary workers were normally laid off. Between 1929 and 1933 unemployment had gone from 3 percent to 25 percent, almost 13 million people had lost their jobs in that span of time. If you hadn't been laid off from your job, your pay had been reduced and/ or your hours per week had been reduced as well. The Great Depression wasn't a great time to be an ordinary worker. 

5. How did the Great Depression affect the world economy?
The Great Depression had also affected Europe's economy as well. The Great Depression limited Americas ability to import European goods which made their economy bad in turn. Also with having to pay World War I Reparations, Europe didn't have a good economy to start out with during this time and having the Great Depression added on to it made it awful for the European economy.