Key economic events in U.S. history

Where the answer comes from: the highest point on the line is labeled 24.9, above the year '33 (1933).

Step by step:

1. Scan the line for its tallest point. The values climb from 3.2 (1929) to 23.6 (1932) and then to 24.9 in 1933.
2. After 1933 the line goes down: 21.7 in 1934, 20.1 in 1935.
3. Check the other choices: 1929 was the lowest point (3.2), 1938 was a smaller second rise (19.0), and 1941 was 9.9.

So the unemployment rate peaked in 1933, the worst year of the Great Depression—about one in four workers had no job.

Tip: for "highest/lowest" questions, compare the actual data labels rather than eyeballing. Two points can look close (23.6 and 24.9 here).

Where the answer comes from: the graph's labels for 1933–1938 are 24.9, 21.7, 20.1, 16.9, 14.3, and then 19.0 in 1938.

Step by step:

1. From 1933 to 1937 each value is lower than the one before (24.9 → 21.7 → 20.1 → 16.9 → 14.3). So unemployment fell every year in that span.
2. In 1938 the value jumps to 19.0—a rise. (Historians call this the "Roosevelt recession," which followed cuts in federal spending.)
3. The other choices fail: unemployment did not return to 1929 levels by 1941 (9.9 vs. 3.2); it rose every year from 1929 to 1933 but mostly fell after the New Deal began; and it was above 20% in 1932, 1933, 1934, and 1935.

Answer: Unemployment fell each year from 1933 to 1937, then rose in 1938.

Tip: "Supported by the graph" means every part of the statement must match the data. One false part makes the whole choice wrong.

Where the answer comes from: in the graph, the bar above 1968 is labeled $1.60.

Step by step:

1. Find 1968 on the horizontal axis. It is the fourth bar from the left.
2. Read the label at the top of the bar: $1.60. You can check it against the vertical axis: the bar ends a little more than halfway between $1 and $2.
3. Eliminate the others: $1.00 belongs to the 1956 bar, $0.75 to the 1950 bar, and $3.35 to the 1981 bar.

Answer: $1.60 per hour.

Check: the bars must rise from left to right, because the minimum wage was never cut. $1.60 is between the 1956 value ($1.00) and the 1981 value ($3.35), so it fits.

Tip: on bar graphs, put your finger on the label you need (the year) first, and only then read the value. Most wrong answers come from reading the bar next door.

Evidence: the introduction explains that trusts "controlled whole industries," and Section 1 declares illegal every "combination in the form of trust or otherwise, or conspiracy, in restraint of trade."

Step by step:

1. Restraint means holding something back or limiting it.
2. The law targets trusts and conspiracies—businesses joining together. When competitors join to control prices or keep rivals out, they limit free competition in the market.
3. So "restraint of trade" means limiting competition or holding back free trade.
4. Eliminate the others: the law is not about taxes on imports, not about workers being held back physically, and not about government rules on trade—the law itself is the government rule.

Answer: limiting free competition in buying and selling.

Check: put the meaning back into the sentence: "Every … conspiracy, limiting free competition among the several States … is hereby declared to be illegal." It makes sense.

Tip: for word-meaning questions, replace the phrase with each answer choice and reread the sentence. Use the purpose of the document (here, stopping trusts) as your guide.

Evidence: paragraph 3 says the task of putting people to work "can be accomplished in part by direct recruiting by the Government itself" while "accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources."

Step by step:

1. Two features must match: (a) the government itself hires workers, and (b) the work involves natural resources.
2. The Civilian Conservation Corps (CCC), created in 1933, hired young men directly to plant trees, fight soil erosion, and build trails and parks in national forests. It matches both features.
3. The FDIC insured bank deposits—a banking reform, not a jobs program. The SEC regulated the stock market. Social Security (1935) paid old-age pensions and unemployment insurance; it gave income, not government jobs.

Answer: the Civilian Conservation Corps.

Tip: when a question links a primary source to a historical program, list the key features in the quote and pick the program that matches all of them.

Evidence: paragraph 4 lists safeguards "against a return of the evils of the old order": "a strict supervision of all banking and credits and investments" and "an end to speculation with other people's money."

Step by step:

1. Speculation is risky buying of stocks or other assets to make a quick profit. In the 1920s, many people bought stocks with borrowed money, and banks gambled with depositors' funds. That speculation helped cause the 1929 crash.
2. The Securities and Exchange Commission (SEC), created in 1934, was set up to watch the stock market, require companies to share honest financial information, and stop fraud—directly addressing investment speculation.
3. The CCC created jobs (paragraph 3's goal). The Agricultural Adjustment Act raised farm prices. Social Security gave pensions. None of these supervised investments.

Answer: creating the Securities and Exchange Commission to regulate the stock market.

Tip: match the problem named in the source to the program designed to fix that exact problem. A real New Deal program that solves a different problem is still a wrong answer.

Evidence: paragraph 1 describes fear as "nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance." The introduction notes that "banks across the country were failing."

Step by step:

1. Roosevelt says fear paralyzes action. He wants to turn "retreat into advance."
2. In 1933, panicked depositors rushed to pull cash out of banks (bank runs), which caused even more banks to fail. Fear was making the crisis worse.
3. So his purpose was to calm public panic and build confidence so Americans would support recovery efforts.
4. Check the others: he does not mention a foreign war (he uses war only as a comparison in paragraph 3); he does not say government should stay out—paragraph 3 calls for government hiring; and paragraph 1 blames fear, not the banks.

Answer: to calm public panic and restore confidence so that recovery efforts could move forward.

Tip: for purpose questions, ask "What did the speaker want the audience to feel or do?" and check that the context (date, situation) supports it.

Data: 1973 — inflation 6.2%, unemployment 4.9%. 1975 — inflation 9.1%, unemployment 8.5%.

Step by step:

1. From 1973 to 1975, inflation went up (6.2 → 9.1) and unemployment went up (4.9 → 8.5). Both rose together. That is stagflation, and it followed the October 1973 oil embargo.
2. "When inflation rose, unemployment always fell" — false; 1973–1975 shows both rising.
3. "Inflation was highest in 1974" — false; 1974 was 11.0, but 1979 (11.3) and 1980 (13.5) were higher.
4. "Unemployment rose every year" — false; it fell from 8.5 (1975) to 5.8 (1979).

Answer: Between 1973 and 1975, both inflation and unemployment increased.

Tip: a graph with two lines invites "both/either" questions. Read each line separately (use the legend: blue = inflation, red = unemployment), and beware of absolute words like always and every.

Evidence: paragraph 3 says, "Mechanical reapers, steel plows, and later tractors let one farmer do the work that once needed many hands. As farms needed fewer workers, many rural Americans … moved to growing cities."

Step by step:

1. The question asks for a cause of farms needing fewer workers.
2. Paragraph 3 names the cause directly: new farm machines let one farmer do the work of many.
3. The railroad (paragraph 2) helped factories reach a national market—true, but it is not described as reducing farm labor. Immigration (paragraph 3) is a result of job opportunities in cities, not a cause of fewer farm jobs. Suburban homebuilding (paragraph 4) came after World War II, and the passage links it to the postwar boom, not to farm labor.

Answer: New machines such as mechanical reapers and tractors.

Tip: cause-and-effect questions often hide the cause in the sentence just before a signal phrase like "As …," "Because …," or "As a result …." Find the effect named in the question, then look right before it.

Evidence: paragraph 2 says the bank "does not put the money into a safe deposit vault. It invests your money in many different forms of credit—bonds, commercial paper, mortgages and many other kinds of loans." It adds that "the total amount of all the currency in the country is only a small fraction of the total deposits in all of the banks."

Step by step:

1. A depositor's money is not sitting in the bank; most of it has been loaned out or invested.
2. If everyone asks for cash at once (a bank run), the bank cannot quickly turn those loans back into cash.
3. Roosevelt even notes that all the currency in the country is only "a small fraction" of all deposits—so there is simply not enough cash for everyone at once.
4. The other choices are not in the speech: he does not blame stolen funds, does not say the banks were ordered to keep money, and does not mention gold being sent overseas.

Answer: because banks lend and invest most deposits instead of keeping them as cash.

Check: this cause explains the effect in the introduction—when worried people rushed to withdraw savings, "thousands of banks closed."

Tip: in cause-and-effect questions, find the sentence that explains how something works. Here the "how" is in paragraph 2, not in the more famous lines of paragraph 4.

Data: the bars show $1.00 in 1956 and $3.35 in 1981.

Step by step:

1. Three times $1.00 is $3.00. Since $3.35 is greater than $3.00, the minimum wage more than tripled from 1956 to 1981. The statement is supported.
2. "The minimum wage was cut at least once" — every bar is taller than the one before it, so no cut appears in the graph.
3. "Each increase was the same size" — the increases differ: $0.25 → $0.75 is +$0.50, while $5.15 → $7.25 is +$2.10.
4. "The rate was higher in 1991 than in 1997" — reversed: $4.25 (1991) is lower than $5.15 (1997).

Answer: The minimum wage more than tripled between 1956 and 1981.

Check: $3.35 ÷ $1.00 = 3.35, which is greater than 3.

Tip: "supported by the graph" means you can prove every word with the numbers shown. Do quick mental math (multiply, compare) rather than judging bar heights by eye.

Evidence: the introduction says Americans "rushed to pull their savings out of banks," and the speech was given "the day before banks began to reopen." Paragraph 3: "it is safer to keep your money in a reopened bank than under the mattress." Paragraph 4 asks people not to be "stampeded by rumors or guesses."

Step by step:

1. Keeping money "under the mattress" means withdrawing it and hiding it at home—exactly what panicked people had been doing.
2. If people rushed to withdraw again when banks reopened, the banks would fail again (paragraph 2 explains that banks do not hold all deposits as cash).
3. So Roosevelt wanted to persuade people to leave their money in (or return it to) the reopened banks.
4. Eliminate: he is not telling people to hide cash at home (the opposite), not announcing that banks will stay closed (they were reopening), and not asking people to buy gold.

Answer: to persuade Americans to keep their savings in the reopened banks instead of withdrawing them.

Check: this purpose matches the speech's closing appeal: "Let us unite in banishing fear."

Tip: connect the quotation to the date and situation in the introduction. A speaker's purpose usually answers a specific problem happening at that moment.

Evidence: the table shows bank suspensions climbing from 659 in 1929 to about 4,000 in 1933. The passage then says the Banking Act of 1933 "created the Federal Deposit Insurance Corporation (FDIC)," and that afterward "very few insured banks failed, and bank runs became rare."

Step by step:

1. The problem is banks failing, often because frightened depositors all withdrew at once (bank runs).
2. Deposit insurance promised that savers would get their money back (up to $2,500 at first) even if a bank failed. With that promise, people had no reason to run on banks.
3. Eliminate: the Works Progress Administration created jobs; the Agricultural Adjustment Act raised farm prices; Social Security gave pensions. All were real New Deal programs, but none protected bank deposits.

Answer: creating the FDIC to insure bank deposits.

Check: the passage links the FDIC directly to the result—failures became rare after 1934.

Tip: many New Deal programs appear as answer choices. Match the program's job to the exact problem in the source: banks → FDIC; stock market → SEC; jobs → CCC/WPA; old age → Social Security.

Evidence: paragraph 3 says, "At first, the law had little effect. In 1895 … the Supreme Court ruled that the law did not apply to a sugar trust that controlled most sugar refining."

Step by step:

1. The claim is about the early years of the law and about its weak effect on big business.
2. The 1895 E. C. Knight ruling shows the courts letting a trust that controlled most of an industry escape the law. That directly supports the claim.
3. Eliminate: Standard Oil's 90 percent share (paragraph 2) describes the problem before the law, not how the law worked. The 1911 Standard Oil breakup shows the law becoming effective—it weakens the claim. The Clayton Act (1914) is a later law.

Answer: The Supreme Court ruled in 1895 that the law did not apply to a sugar trust that controlled most sugar refining.

Check: ask, "If this detail were false, would the claim be weaker?" Yes—without the ruling, there is less proof the early law was weak.

Tip: the best evidence matches the claim's time period and its exact point. A true detail about a different time (later reforms) is a common trap.

Evidence: paragraph 2: the government "signed contracts worth billions of dollars, and new shipyards and aircraft plants opened." Paragraph 3: "More than 15 million Americans served in the armed forces, and factories needed workers to replace them."

Step by step:

1. The effect is falling unemployment. Look for what created jobs or removed people from the job market.
2. Two causes appear together: huge military production created factory jobs, and millions of workers joined the armed forces, leaving openings.
3. Eliminate: rationing (paragraph 4) limited what families could buy; it did not create jobs. The GI Bill (paragraph 5) passed in 1944 and helped veterans after the war. The passage never says the war ended the minimum wage.

Answer: wartime production and military service created a huge demand for workers.

Check: this matches a well-known lesson of history: massive government spending during WWII ended the high unemployment of the Depression years.

Tip: when a question asks for a cause, look for words such as needed, opened, replaced. A detail that comes later in time cannot cause an earlier change.

Evidence: the passage (paragraph 3) says unemployment "peaked at 10.0 percent in October 2009." The graph shows the Great Depression peak at 24.9% in 1933.

Step by step:

1. Half of 24.9 is about 12.5. Since 10.0 is less than 12.5, the Great Recession's peak was less than half the Depression's peak.
2. "About the same" — false (10.0 vs. 24.9).
3. "Unemployment peaked in 2008" — false; the passage says October 2009, more than a year after Lehman Brothers failed in September 2008.
4. "Both crises began with the failure of Lehman Brothers" — false; Lehman failed in 2008. The Depression began with the 1929 stock market crash, decades earlier.

Answer: Peak unemployment in the Great Recession was less than half the peak during the Great Depression.

Paragraph 5 offers one reason the damage was smaller: policymakers acted faster, and deposit insurance (created in 1933) prevented the kind of bank collapse seen in the 1930s.

Tip: for two-source questions, pull one fact from each source, write them side by side (10.0 vs. 24.9), and only then read the choices.

Evidence: Historian A: "By 1937, the rate had fallen to about 14 percent" from about 25 percent in 1933. Historian B: "Unemployment did fall from 1933 to 1937."

Step by step:

1. Both historians state that unemployment fell between 1933 and 1937. That is the shared point.
2. They disagree about what it means: A says the New Deal "worked"; B says it "did not end the Depression."
3. Eliminate:
   • "The New Deal fully ended the Depression" — B denies this, and even A admits "Recovery was not complete."
   • "World War II spending ended the Depression" — only B says this.
   • "The New Deal was too small and too cautious" — only B's opinion.

Answer: Unemployment fell between 1933 and 1937.

Check: a point of agreement must be found in both texts. Highlight one sentence from each source that says the same thing before choosing.

Tip: historians often agree on facts but disagree on interpretation. Separate the numbers (what happened) from the judgment (whether it was a success).

Data: 1929: 659; 1930: 1,350; 1931: 2,293; 1932: 1,453; 1933: about 4,000.

Step by step:

1. Add 1929 and 1930: 659 + 1,350 = 2,009. The 1931 figure, 2,293, is larger than 2,009. So more banks failed in 1931 than in 1929 and 1930 combined. Supported.
2. "Failures fell every year after 1929" — they rose in 1930 and 1931. False.
3. "1932 was the worst year" — 1932 (1,453) was lower than both 1931 (2,293) and 1933 (about 4,000). False.
4. "Failures stopped after the 1929 crash" — the table shows thousands of failures after 1929. False.

Answer: More banks failed in 1931 than in 1929 and 1930 combined.

Check: 2,293 − 2,009 = 284, a positive number, so 1931 really is larger.

Tip: GED data statements often hide a small calculation (combine, double, compare). Write the numbers down and do the math instead of guessing from size.

Evidence: Section 2 makes guilty "Every person who shall monopolize, or attempt to monopolize … any part of the trade or commerce among the several States." A history textbook (the passage "Big Business and the Progressive Response," paragraph 2) explains the danger: "When one company controls almost all of a market, it can raise prices because customers have nowhere else to go."

Step by step:

1. Monopolize means to gain control of a whole market so there is no real competition.
2. Section 2 punishes monopolizing or trying to monopolize. Its purpose was to protect competition so that one firm could not control a market and set unfair prices.
3. Eliminate:
   • "Make all large businesses illegal" — the law does not mention size; it targets monopolizing. Big companies that competed fairly were not outlawed. This overstates the law.
   • "Set fair prices for oil and sugar" — the law does not set any prices.
   • "Protect workers' right to strike" — the passage says the law was actually used against strikers in 1894; unions got protection only in the 1914 Clayton Act.

Answer: to keep any one business from taking control of a whole market and shutting out competition.

Check: the penalties in the introduction (fines, jail) are aimed at people who monopolize, matching this purpose.

Tip: for questions on the purpose of a law, read the exact action the law forbids. Answers that stretch the law beyond its words ("all," "every large") are usually wrong.

Evidence: paragraph 4: "some products were scarce at home. The Office of Price Administration set price limits and ran a rationing program: families received ration books with stamps that limited how much sugar, coffee, meat, gasoline, and tires they could buy."

Step by step:

1. The sentence explains rationing right after the colon: stamps limited how much of certain goods each family could buy.
2. The reason is given just before: the products were scarce because so much went to the military.
3. So rationing means limiting the amount of a scarce good each person or family may buy so that it is shared fairly.
4. Eliminate:
   • "Setting the highest price a store may charge" — that is a price limit (price ceiling), which the sentence lists as a separate action ("set price limits and ran a rationing program").
   • "Lending money to the government" — that describes war bonds.
   • "Giving away free goods" — families still paid; stamps limited quantity.

Answer: limiting how much of a scarce product each family could buy.

Check: substitute the meaning: "ran a program limiting how much of scarce products each family could buy"—it matches the ration books.

Tip: when two related ideas appear in the same sentence joined by and, they are different things. Do not let a nearby term (price limits) steal the meaning of the target word.

Data: the graph shows about 69% of workers in farming in 1840 and about 41% in 1900.

Step by step:

1. Find the change: 41 - 69 = -28 percentage points.
2. Divide by the original (1840) value: \dfrac{-28}{69} \approx -0.406
3. Multiply by 100: about -41\%. The share decreased by about 41 percent.

Why the other answers are tempting:

• 28% is the drop in percentage points, not the percent change.
• 68% comes from dividing by the new value (28 ÷ 41).
• 59% is 41 ÷ 69—the share that remained, not the decrease.

Answer: about 41%

Tip: when both numbers are already percents, separate "percentage points" (simple subtraction) from "percent change" (divide by the starting value). The GED loves this trap.

Evidence: the table shows 659 + 1,350 + 2,293 + 1,453 = 5,755 bank suspensions from 1929 through 1932. The fireside chat was given on March 12, 1933, and urges people not to be "stampeded by rumors" and to keep money "in a reopened bank" rather than "under the mattress."

Step by step:

1. By the time Roosevelt spoke, thousands of banks had already failed. Many Americans had lost savings, so fear of banks was widespread.
2. That history explains why Roosevelt spent his speech building confidence: without trust, people would withdraw cash again and more banks would fail.
3. Eliminate:
   • "The speech caused failures to drop in 1932" — the speech was in 1933; it cannot affect 1932.
   • "The table proves the speech ended all bank failures" — the table shows about 4,000 suspensions in 1933, and the passage credits deposit insurance (1934) with making failures rare.
   • "Roosevelt said currency was larger than deposits" — he said currency was "only a small fraction" of deposits.

Answer: Roosevelt's effort to restore confidence came after years of heavy bank failures, which helps explain why he urged people not to withdraw their money.

Check: a two-source conclusion must use a fact from each source and must not claim more than either source shows.

Tip: watch for answers that claim one source proves a big effect. Data in a table can show what happened, but it rarely proves that one speech caused it.

Evidence: the note under the graph says the amounts "are in the dollars of each year. They are not adjusted for inflation, the general rise in prices over time."

Step by step:

1. The student's math is right: 7.25 ÷ 0.25 = 29. The wage in dollars did grow 29 times.
2. But what a worker can buy depends on both the wage and prices. Prices of food, rent, and other goods also rose greatly between 1938 and 2009.
3. Because the graph shows nominal dollars (not adjusted for inflation), it gives no information about prices. So it cannot show how much more a worker could buy.
4. Eliminate:
   • "The graph does not show 1938" — it does ($0.25).
   • "The wage actually fell" — the bars show it rising every time.
   • "7.25 ÷ 0.25 is not 29" — it is exactly 29; the math is not the problem.

Answer: The graph does not account for rising prices, so it cannot show how much a worker could actually buy.

Check: if prices had risen even faster than wages, a worker could have bought less. The graph alone cannot rule this out.

Tip: before accepting a claim about money over long periods, ask: "Is it adjusted for inflation?" Nominal numbers show dollars, not buying power.

Historian B's claim: the New Deal did not end the Depression; "The Depression truly ended only when massive spending for World War II put nearly every American who wanted a job to work."

Evidence in the WWII passage: paragraph 3 says unemployment, "which had been about 15 percent in 1940, fell to about 1 percent by 1944," and paragraph 2 says the government "signed contracts worth billions of dollars."

Step by step:

1. B needs proof that wartime spending, not the New Deal, ended high unemployment.
2. The drop from about 15% (1940, after years of the New Deal) to about 1% (1944, during the war) is exactly that proof.
3. Eliminate:
   • Rationing of sugar and gasoline — about scarcity, not about ending unemployment.
   • The GI Bill helping the postwar boom — concerns the late 1940s, not the end of the Depression.
   • War bonds — about how the war was paid for, not about jobs.

Answer: Unemployment fell from about 15 percent in 1940 to about 1 percent by 1944.

Check: this detail also matches B's own statement that unemployment "was still above 14 percent" in 1940—the two sources fit together.

Tip: when asked what evidence an author would use, choose the detail that proves the author's main claim, not one that is merely about the same era.