IB History Reasons for the Great Depression Key Definitions

A record of money entering and leaving a country through trade, investment, borrowing, and debt payments.

A rapid withdrawal of deposits caused by fear that a bank will fail, which can make an otherwise solvent bank unable to meet immediate demands.

A sustained fall in the general price level that can increase the real burden of debt and discourage spending.

A severe drought and ecological disaster that struck the Great Plains of the USA and Canada during the 1930s. Years of overfarming had removed native grasses that anchored topsoil. When drought arrived, massive dust storms stripped away the soil, destroying crops and forcing hundreds of thousands of farming families to abandon their land. The worst years were 1934 and 1936. Many displaced families, known as 'Okies', migrated west to California seeking work.

A period of prolonged high unemployment and low investment in economic activity, more severe and longer-lasting than a recession.

A monetary system in which the value of money is tied to the value of gold. A country must hold the same value of gold as it has money in circulation. This limits how much money can be printed and helps prevent inflation, but also restricts economic flexibility.

A policy of developing domestic industries to replace manufactured goods previously imported from abroad.

A demand that an investor provide more cash or securities when the value of assets bought with borrowed money falls.

A series of programmes, public works projects, financial reforms, and regulations introduced by President Franklin D. Roosevelt between 1933 and 1939 in response to the Great Depression. Key agencies included the Civilian Conservation Corps (CCC), the Works Progress Administration (WPA), the Agricultural Adjustment Administration (AAA), and the Social Security Administration. The New Deal expanded the federal government's role in the economy and established the principle that government bore responsibility for citizens' basic welfare.

Policies and actions taken by a government (such as tariffs or taxes on imports) designed to decrease imports into a country. Intended to protect domestic industries and jobs by making imported goods more expensive than domestically produced goods.