WHERE DID ALL THE MONEY GO? The Great Depression Mystery
An update and computer application of
Unit 7, Lesson 1 from Eyes on the Economy Volume II.

Go to the Teacher Version

Introduction

History
During the 1920s, the United States as a whole, with the exception of the farmers, enjoyed prosperity. The seeming affluence of the Roaring Twenties began to evaporate in 1929. By 1932, 12 million people were out of work.

Mystery
The American economy went from unprecedented economic growth in the 1920s to unprecedented misery in the 1930s. Why?

Economic History
Among the major reasons for the Great Depression were overproduction, restrictive trade policy, speculation in the stock market based on buying stock on credit, problems with the banking system, and tax policy. What began as a mild recession following a lengthy period of economic expansion soon became a depression. By the 1930s the amount of money in circulation had drastically decreased.

Lesson Description

In this lesson, you will read a brief passage that poses the mystery, " How did the Great Depression happen?" As detectives, you will gather clues using the Internet to investigate the mystery through a series of clue sheets. In the first step you will complete a retrieval chart that looks at the consumer price index, unemployment rate, federal spending, and US and world events that have economic and political implications. In groups, you will then do additional research on the Internet that will give you information on the economic conditions of the country looking at labor, income, unemployment, government spending, and the public debt. Then you will read three articles on some of the top economic events of the century. They will focus on Henry Ford 's impact, the Federal Reserve System's role in the economy, and the stock market crash of 1929. Following that activity, you will complete an interactive web model that demonstrates the interdependence of a market system.

Part 1

Activity #1 - (PDF 8k - 1 page)

Clue Sheet #1 - (PDF 10k - 3 pages)

Read Activity #1 that focuses on the contrasts between the 20s and the 30s and poses the mystery "What caused the Great Depression?"

After reading the mystery, go to the web site: http://www.infoplease.com/history.html. Select a five year interval (1920-1924, 1925-1929, 1930-1935). Research these five years on the site and complete that section of Clue Sheet #1. Within groups of three, one for each time period, share the information with one another until everyone has completed Clue Sheet #1.

Think about and be prepared to discuss the following questions:

• What was happening to consumer prices during the 1920s? 1930s?
• Which groups would be most negatively affected by the changes in prices you identified?
• What was the trend in the unemployment rate in the 20s? 30s?
• Why was that occurring in the 30s?
  
• What was happening to spending by the federal government in the 20s? 30s?
• What even ts might explain government spending patterns in the 20s and 30s?
• What events occurred in the U.S. or the world that would affect peoples' lives directly or indirectly in the 20s? 30s? Explain that impact of some of these events.

Part 2 >>