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Inflation Rate
Definition - The average increase in price
Rate/Amount - 10.74% - 33%
Up/Down Trend - The rate was decreasing over the 25 year period
Reasons for Trend - Crash of the stock market caused the inflation rate to drop into the negatives before it barely creeped back into the positives -
Period: to
Good Ol' Days
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Consumer Spending
Definition - The amount of money spent by households in an economy
Rate/Amount - (See Image)
Up/down Trend - Consumer spending decreased for half of goods and increased for the other half
Reasons for Trend - The Great depression caused people to spend less
Chart - http://3.bp.blogspot.com/-HtrOZSmjUEM/U2nEwmvNm5I/AAAAAAAABM4/-dJQ9B17hCM/s1600/consumer_spending_1901-2012.png -
Gross Domestic Product
Definition - The monetary value of all the finished goods and services produced within a country's borders in a specific time period
Rate/Amount (in billions)-
1920- 88.4
1921-73.6
1922-73.4
1923-85.4
1924-87
1925-90.6
1926-97
1927-95.5
1928-97.4
1929-103.6
1930-91.2
1931-76.5
1932-58.7
1933-56.4
1934-66.0 -
Gross Domestic Product Continued
Up/Down Trend - Through the early-mid 1920s, the trend rose and fell but stayed around the same. However, once the 1930s hit with the stock market crash and bank closures, the overall GDP dropped significantly
Reasons for Trend - THe GDP increased because there was an efficient production in the 20s. With the creation of the assembly line, products were created faster and with less work so efficiency went up.
Chart -
https://theeconomyandtaxpolicy.wordpress.com/category/gdp-charts-g1-g15/page/ -
Unemployment Rate
Definition - a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.
Rate/Amount - 1920 - 5.2%
1928- 4.2%
1930 - 8.7%
1932 - 23.6%
1934 - 21.7%
1936 - 16.9%
1938 - 19.0%
Up/Down Trend -
The unemployment rate rapidly increased and then dropped back down again.
Reasons for Trend - The Great Depression caused the economy to falter and companies began laying people off. -
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Fiscal Policy
Fiscal Policy wasn't invented until 1933, so there is no data for our time period, -
Consumer Price Index
Definition - an index of the variation in prices paid by typical consumers for retail goods and other items.
1910-1911: 28
1912: 29
1913: 29.7
1914-1915: 30
1916: 32.7
1917: 38.5
1918: 45.2
1918: 45.2
1919: 52.1
1920: 60.2
1921: 53.6
1922: 50.3
1923: 51.2
1924: 51.5
1925: 52.7
1926: 53.2
1927: 52.2
1928: 51.6
1929: 51.6
1930: 50.2
1931: 45.7
1932: 41
1933: 38.9
1934: 40.2 -
GDP Per Capita
1910- $4,964
1911 - $5,046
1912 - $5,201
1913 - $5,301
1914 - $4,799
1915 - $4,864
1916 - $5,459
1917 - $5,248
1918 - $5,659
1919 - $5,680
1920 - $5,552
1921 - $5,323
1922 - 5,540
1923 - $6,164
1924 - $6,233
1925 - $6,282
1926 - $6,602
1927 - $6,576
1928 - $6,569
1929 - $6,899
1930 - $6,213
1931 - $5,691
1932 - $4,908
1933 - $4,777
1934 - $5,114 -
Monetary Policy
Definition -
The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve Bank’s discount window
Discount Rates in Percentage:
1929 - 5%
1930 - 3%
1931 - 2%
1932 - 2.7%
1933 - 2.5% -
Effects of Government Expenditures
Definition: Government expenditures influence the ecnomy because they are used for national defense and education and they are a percentage of the total GDP
1910 - $2.6 billion
1920 - $11.3 billion
1930 - $11.2 billion -
Business Cycle
- The 1920s time was a period of exansion because consumer spending increased greatly, more surplus in production of goods, and people bought goods solely on credit.
- Trade with foreign countries greatly declined due to post WWI debts in Europe. Countries had placed high tariffs on goods and excess money was spent on infrastructure.
- The problem with the business cycle was that the trough didn’t last 3-5 years like normal
- Great Depression resulted in a 10 year trough
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Impact of Interest rate Fluctuations
Chart- http://www.crestmontresearch.com/docs/i-rate-relationship.pdf
- Interest rates affect investment. They are not the only thing that determines the amount of investment and are not necessarily even the most important determinant of investment but they do affect investment and so interest rates need to be considered. The percent of interest rates dropped and the government thought this was just apart of the business cycle so they did little to help. By the end of the depression, the interest -
Inflation
- An increase in the average price level in the economy
- The inflation rate dramatically increased from 1910-1915 then dropped from 1915 to 1920 and stayed low to until about 1934
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Effects of Tax Policies on Businesses
Tax policies determine how much and what kind of taxes the businesses have to pay -
1910 - 1934 Families
Families were very close knit and the dad was the head of the household and controls everyone. Women's rights were very controversial: they fought for suffrage; however others thought it would finish the family. Consumer spending was high because of low prices and new inventions. However; the depression changed everything: marriages were delayed, birth rates dropped, prices increased, and all members of the family had to work to make money. -
