What caused the Great Depression, and how did it affect ordinary Americans?
Analyze the causes of the Great Depression, including the stock market crash of 1929, overproduction, buying on margin and credit, bank failures, and the unequal distribution of wealth, and its impact on Americans (NGSSS SS.912.A.5 and A.6, Reporting Category 2).
An EOC-level answer on the causes of the Great Depression for the Florida US History exam: the stock market crash of 1929, buying on margin, overproduction, bank failures, the unequal distribution of wealth, the Hawley-Smoot Tariff, and the human impact, with worked stimulus questions.
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What this topic is asking
The prosperity of the 1920s ended in the worst economic collapse in American history. The NGSSS benchmarks SS.912.A.5 and SS.912.A.6 want you to analyze the causes of the Great Depression, the role of the 1929 stock market crash, and its devastating impact on Americans. This topic opens Reporting Category 2 (Global Military, Political, and Economic Challenges) and is often tested with an economic graph, a photograph of breadlines, or a question about the chain of causes.
The stock market crash
In the late 1920s, soaring stock prices encouraged reckless speculation. Many investors were buying on margin, paying only a small fraction of a stock's price and borrowing the rest. When prices began to fall, lenders demanded repayment, investors had to sell, prices crashed further, and many were left owing money they could not repay.
The deeper causes
The banking collapse
A central feature of the Depression was the wave of bank failures. Banks had made risky loans and invested in the market; when borrowers defaulted and panicked depositors rushed to withdraw their money (bank runs), thousands of banks collapsed. Because deposits were not insured, ordinary people lost their life savings, and surviving banks stopped lending, deepening the downturn.
The human impact
Try this
Q1. Identify three causes of the Great Depression. [3]
- Cue. Any three of: speculation and buying on margin; overproduction; unequal distribution of wealth; excessive consumer debt; bank failures; high tariffs (Hawley-Smoot).
Q2. Describe two ways the Great Depression affected ordinary Americans. [2]
- Cue. Any two of: about 25 percent unemployment; loss of homes and farms; breadlines and soup kitchens; Hoovervilles (shantytowns); lost savings from bank failures.
Exam-style practice questions
Practice questions written in the style of FLDOE exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
FL EOC (US History, style)1 marksIn the 1920s many investors bought stocks 'on margin.' This practice helped cause the Great Depression because buying on margin meantShow worked answer →
A single-select item (Reporting Category 2, SS.912.A.5 and A.6).
Correct answer: investors borrowed most of the money to buy stock, so when prices fell they could not repay their loans, deepening the crash and banking crisis.
Markers reward connecting margin buying (borrowing to speculate) to the collapse when stock prices fell. Distractors saying buying on margin meant paying cash in full, or that it had no effect, misstate the practice and its danger.
FL EOC (US History, style)1 marksA line graph shows US bank failures rising sharply from 1929 to 1933, with thousands of banks closing. Which conclusion is best supported by the graph?Show worked answer →
A single-select stimulus item (Reporting Category 2, SS.912.A.6).
Correct answer: the banking system collapsed during the early Depression, wiping out the savings of many Americans.
Markers reward reading the trend (rising bank failures) and connecting it to lost savings and a deepening Depression. Distractors claiming banks were thriving, or that failures fell, contradict the data.
Related dot points
- Analyze the economic and cultural features of the 1920s, including mass production and consumerism, the automobile, radio and movies, the Harlem Renaissance, and changing roles for women (NGSSS SS.912.A.5, Reporting Category 1).
An EOC-level answer on the Roaring Twenties for the Florida US History exam: mass production and the consumer economy, the automobile and the assembly line, radio and movies, the Harlem Renaissance, the flapper and changing roles for women, and buying on credit, with worked stimulus questions.
- Analyze the cultural and social conflicts of the 1920s, including Prohibition, the Red Scare, immigration restriction and quotas, the revived Ku Klux Klan, nativism, and the Scopes Trial (NGSSS SS.912.A.5, Reporting Category 1).
An EOC-level answer on the cultural conflicts of the 1920s for the Florida US History exam: Prohibition and its effects, the first Red Scare, immigration quotas and nativism, the revived Ku Klux Klan, and the Scopes Trial over evolution, with worked stimulus questions.
- Analyze the causes and effects of the Dust Bowl, including drought and poor farming practices, the migration of Okies to California, and its connection to the Great Depression (NGSSS SS.912.A.6, Reporting Category 2).
An EOC-level answer on the Dust Bowl for the Florida US History exam: the causes of the dust storms in drought and poor farming practices, the human and environmental impact, the migration of Okies to California, and the link to the Great Depression, with worked stimulus questions.
- Analyze Franklin D. Roosevelt's New Deal, its goals of relief, recovery, and reform, key programs such as the CCC, WPA, TVA, and Social Security, and the expanded role of the federal government (NGSSS SS.912.A.6, Reporting Category 2).
An EOC-level answer on the New Deal for the Florida US History exam: FDR's response to the Depression, the three Rs of relief, recovery, and reform, the alphabet agencies (CCC, WPA, TVA, FDIC), Social Security, and the expanded federal government, with worked stimulus questions.
- Analyze the impact and legacy of the New Deal, including the debate over its constitutionality, the Supreme Court conflict, criticisms from left and right, and its lasting effect on the role of government (NGSSS SS.912.A.6, Reporting Category 2).
An EOC-level answer on the impact of the New Deal for the Florida US History exam: the lasting expansion of federal power, the debate over constitutionality and the court-packing plan, criticisms from the left and right, what the New Deal did and did not achieve, and its legacy, with worked stimulus questions.
Sources & how we know this
- US History End-of-Course Assessment Test Item Specifications — Florida Department of Education (2013)
- US History Reporting Category Statements — Florida Department of Education (2013)