Gold standard, Fed founding, Great Depression, 2008 crisis, bubbles, and key crisis terms.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is the gold standard?
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A monetary system in which the value of currency is directly tied to a fixed amount of gold.- During what time period was the United States on the classical gold standard?
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Approximately 1879 to 1933.- What was the Bretton Woods Agreement?
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A 1944 international agreement that established fixed exchange rates, with the US dollar pegged to gold at $35 per ounce.- Why did countries abandon the gold standard?
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Because it limited their ability to expand the money supply and respond to economic crises; it also created deflation pressures.- How does the gold standard constrain monetary policy?
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A country cannot expand its money supply faster than its gold reserves increase.- What relationship exists between the gold standard and deflation?
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The gold standard makes deflation more likely because the money supply cannot grow as fast as output, pushing prices down.- How were exchange rates determined under the gold standard?
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Exchange rates were fixed and determined by the relative gold content of each country's currency.- In what year was the Federal Reserve created?
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1913, through the Federal Reserve Act.- What financial crisis prompted the creation of the Federal Reserve?
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The Panic of 1907, a severe banking and financial crisis.- What was the Glass-Steagall Act?
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A 1933 law that separated commercial banking from investment banking to reduce risk.- What was the original primary purpose of the Federal Reserve?
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To provide an elastic money supply and act as a lender of last resort during financial crises.- When was Glass-Steagall repealed?
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1999, through the Gramm-Leach-Bliley Act, which allowed banks to engage in both commercial and investment banking.- What years did the Great Depression span?
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1929 to 1939, with the worst effects from 1933 to 1937.- What date marks the stock market crash that triggered the Great Depression?
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October 1929, specifically October 29, 1929, known as Black Tuesday.- What caused widespread bank failures during the Great Depression?
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Bank runs, where depositors rushed to withdraw funds, and the Federal Reserve did not act as lender of last resort to stop them.
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