History holds many economic lessons. The Great Depression, in particular, is an event that provides the opportunity to teach and learn a great deal about economics—whether you're studying the economic reasons that the Depression took place, the factors that helped it come to an end or the impact on Americans who lived through it. This module teaches the economic lessons needed to understand this significant experience in U.S. history.
Lesson 1 - Measuring the Great Depression
This lesson introduces tools—such as Gross Domestic Product (GDP), the unemployment rate and the Consumer Price Index (CPI)—that are used to measure the economy's health, through an analysis of simple bar charts and graphs. Developing an understanding of these concepts is critical to understanding the magnitude of the economic problems that took place during the Great Depression.
Lesson 2 - What Do People Say?
There are many suggested causes for the Great Depression. It is important for students to understand that occurrences such as the stock market crash—and other events that affected particular sectors of the economy—were important, but not significant enough to cause the Great Depression. By reading fictitious letters that reflect actual problems and people's concerns during the Great Depression, students begin to identify with the people of that era and to uncover the problems that people experienced during the Great Depression.
Lesson 3 - What Really Caused the Great Depression?
Through participation in two simulations, students determine that bank panics and a shrinking money supply were the primary causes of the Great Depression. Through an additional activity, they see how the many other factors they have discussed, such as problems in the agricultural sector and the stock market crash, exacerbated the situation.
Lesson 4 - Dealing with the Great Depression
Students learn about programs initiated through the New Deal. By comparing and categorizing New Deal programs, they recognize that the value of most of these programs was their effects on the confidence that U.S. citizens had in the economy. Students also identify the impact that these programs had on the role of the U.S. government in the economy.
Lesson 5 - Turn Your Radio On
Students use excerpts from Franklin Delano Roosevelt's "fireside chats" to identify his plans for restoring the economy. They determine that using available technology to communicate was important to FDR's effort to restore consumer confidence.
Lesson 6 - Could It Happen Again?
Students learn about the roles and functions of the Federal Reserve System. Through a simulation, they learn how the Fed manages the money supply through open market operations. They identify what central bankers have learned about implementing monetary policy as a result of the Great Depression. Furthermore, they recognize the steps the central bank has taken to respond effectively to financial crises since that time.