Global Economic Crisis - AP European History
- What economic phenomenon involves a general decline in prices, often leading to reduced consumer spending?
- Deflation. Falling prices reduce business profits and employment.
- What is the economic term for a rapid decline in economic activity across an economy?
- Recession. Temporary economic contraction lasting several months.
- Which policy involves government borrowing to fund infrastructure and public works?
- Deficit spending. Government borrows to fund economic stimulus projects.
- Identify the economic condition characterized by rising prices and increased unemployment.
- Stagflation. Economic stagnation combined with rising inflation.
- What is the term for a country's total economic output adjusted for inflation?
- Real GDP. Measures actual economic growth removing price effects.
- Identify the economic policy that aims to control the money supply and interest rates.
- Monetary policy. Central bank tools to influence economic activity.
- What term describes the severe economic downturn of the 1930s?
- The Great Depression. Decade-long economic collapse following 1929 crash.
- Which policy tool involves government spending and tax adjustments to influence the economy?
- Fiscal policy. Uses taxation and spending to manage economic cycles.
- Which country experienced hyperinflation during the early 1920s?
- Germany. Weimar Republic printed money to pay war reparations.
- Identify the plan that aimed to rebuild European economies after World War II.
- The Marshall Plan. US aid program for European economic recovery.
- Which economic strategy focuses on reducing government intervention in the market?
- Laissez-faire. Free market approach with minimal government interference.
- Name the 1944 conference that established the Bretton Woods system.
- The Bretton Woods Conference. Created international monetary system and exchange rates.
- Which economic crisis led to the widespread adoption of welfare systems in Europe?
- The Great Depression. Economic hardship led to social safety net expansion.
- Identify the 1920s practice of buying stocks with borrowed money.
- Buying on margin. Leveraged speculation increased market volatility risk.
- What was the main cause of the 1929 stock market crash?
- Speculative bubble. Asset prices exceeded their fundamental economic value.
- Name the 1930 tariff act that worsened the Great Depression by reducing international trade.
- The Smoot-Hawley Tariff Act. Protectionist tariffs reduced global trade volumes.
- Which British economist advocated for increased government spending during a recession?
- John Maynard Keynes. Developed theory of deficit spending during downturns.
- Which agreement ended the Bretton Woods system of fixed exchange rates?
- The Smithsonian Agreement. Devalued dollar and introduced floating exchange rates.
- What is the process by which a country experiences a rapid decrease in the value of its currency?
- Currency devaluation. Currency loses purchasing power relative to other currencies.
- Identify the economic theory that suggests government intervention can stabilize economies.
- Keynesian economics. Government spending can stimulate demand during recessions.
- Which global crisis in 2008 was triggered by the collapse of housing markets?
- The Global Financial Crisis. Subprime mortgage crisis spread globally.
- Which international body was established to promote international trade post-World War II?
- The General Agreement on Tariffs and Trade (GATT). Multilateral framework for reducing trade barriers.
- Which international financial institution was created to provide loans to developing countries?
- The World Bank. Provides reconstruction and development financing globally.
- What is the economic term for a rapid increase in the general price level?
- Inflation. Rising prices reduce purchasing power of money.
- What is the term for a prolonged period of high unemployment and low economic activity?
- Economic depression. Severe economic contraction lasting multiple years.
- What was the primary economic policy tool used by governments to combat the crisis?
- Fiscal stimulus. Government spending increases to boost economic activity.
- Which policy involves reducing interest rates to stimulate economic activity?
- Monetary easing. Lower interest rates encourage borrowing and investment.
- Which international organization was founded in 1944 to help stabilize global economies?
- International Monetary Fund (IMF). Created to provide financial stability and exchange rate coordination.
- What event in 1929 marked the beginning of the Global Economic Crisis?
- The Wall Street Crash. Stock market collapse triggered worldwide economic downturn.