Oklahoma Academic Standard 4 .The student will analyze the cycles of boom and bust of the 1920s and 1930s on the transformation of American government, the economy and society.

Objective 4.2  Analyze the effects of the destabilization of the American economy.

   A. Identify causes contributing to an unstable economy including the overproduction of agricultural products, greater speculation and buying on margin in the Stock Market, and the government’s pro-business and laissez-faire policies.

   B. Examine the role of the Stock Market Crash and bank failures in weakening both the agricultural and manufacturing sectors of the economy leading to the Great Depression. 

In a Nutshell

The 1920’s were seen as prosperous times for many Americans. However, students should understand that the economy was predicated on easy access to credit, minimal government oversight, and speculation in the stock market, making growth unsustainable. Irresponsible farming practices caused the agricultural sector to suffer, as well. When the Stock Market crashed, the run on banks caused banks failures, plummeting the financial stability of the country. It is important for students to examine the complex multiple causes of this collapse of a market economy and the role government policies can play in economic crises.

Teacher Action 

Student Action 

• Assist students in evaluating economic data from charts and graphs noting trends in the market prior to the 1920’s and predictions for the next decade.

• Facilitate students with constructing arguments using a combination of evidence related to economic issues of the time, such as the expanded role of the federal government to address a national crisis.

• Analyze the possible consequences, both intended and unintended, of reactions by farmers, stock brokers, bankers and the government to the economic crisis.

• Evaluate the impact of government policies on market outcomes at national and global levels. 

Key Concepts 

Misconceptions 

• government regulations versus laissez faire policies

• Hawley-Smooth Tariff

• Keynesian economic theory

• impact of farming and overproduction on the American economy  

• immediate and long-term effects of the Stock Market crash 

• Students mistakenly assume that the crash of the stock market was the sole cause of the Great depression as opposed to the multiple economic conditions which contributed to the crisis. 

Instructional Resources