Transcript Depression Economic Analysis

Stock Market Prices 1926-1932
1926
1927
1928
1929
1930
1932
Bell
62
90
162
183
145
78
CPR
12
18
30
36
25
2.25
Ford
10
25
55
70
40
5.75
Imperial
Oil
14
22
30
41
25
7.40
5
49
73
0
0
Florida 1
Lands
The Business Cycle: Boom and Bust
Depression Economic Analysis
• Figure 5.1.j
• When was the “trough” of the business cycle of
the 1930s? Explain with reference to the trends
shown in the graphs.
• Figure 5.1.i
• Which province had the biggest decrease in
income? Which had the lowest?
• Wheat Yields
• How do the wheat yield data help to explain the
above? Hypothesize – why do you think wheat
production fell so dramatically?
The Vulnerability of the Canadian
Economy, 1929
• Too heavy a reliance on staple products
•
About 80% of all of Canada’s staple products was sold
outside the country
• the Canadian economy’s reliance on exports
• 33% of Canada’s GNP (Gross National Product) came
from selling goods to other countries
Nearly 40% of Canadian exports were sold to the United
States
• over dependence on the United States as a market and
a source of investment funds
• easy money — credit was too easily available
(example – buying stock on margin)
• RESULT: overproduction of goods — from
wheat to manufactured products and high levels
of debt
• global economic weakness — there would be a
ripple effect from the weakness in other
economies
• The stock market crash of October 1929was The first evidence of The Great
Depression, but was not “The cause”
• It was a sign of fundamental economic
weakness
• later — the weather — drought would
devastate western Canada