The American economy faced great difficulties in 1929.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2020). The mark or mark type is shown in brackets.

1. [1-4] Level 1 One mark for each relevant point; additional mark for supporting detail
2. Overproduction of consumer goods.
3. Farmers saturated the market.
4. As more and more people, who could afford consumer products, were buying them, demand started to drop.
5. Wages did not rise and prices did not fall.
6. People in Europe could not afford US goods.
7. European countries imposed tariffs on American goods.
8. There was an uneven distribution of income.
9. [6] Level 4 Explains TWO reasons
10. [4-5] Level 3 Explains ONE reason
11. [2-3] Level 2 Identifies AND/OR describes reasons
12. [1] Level 1 General answer lacking specific contextual knowledge
13. e.g. 'There was a stock market boom in the 1920s because companies were doing well and people were keen to buy shares. If a company was growing, a speculator could buy shares and sell them only a few months later and make a profit. Many people who did not usually invest in the stock market bought shares.'
14. e.g. 'Speculators could make profits easily.'
15. 'Companies were growing and making profits.'
16. 'People bought shares 'on the margin'.'
17. 'The banks were happy to lend money for people to buy shares.'
18. [10] Level 5 Explains with evaluation of 'how far'
19. [7-9] Level 4 Explanation of both sides
20. [4-6] Level 3 One-sided explanation OR one explanation of both sides 5-6 marks
21. [2-3] Level 2 Identifies AND/OR describes
22. [1] Level 1 General answer lacking specific contextual knowledge
23. e.g. 'The collapse of the banks was the main impact of the Wall Street Crash. When the stock market collapsed the banks, which had lent money to speculators to buy shares, lost a huge amount of money. Many went bankrupt. This meant that anyone who had savings in the bank also lost their money.'
24. OR e.g. 'Unemployment was the main impact of the Wall Street Crash. As businesses crashed people lost their jobs. By 1933 almost 25% of the workforce was unemployed. There were no welfare benefits and people had no money for food or rent.'
25. e.g. 'The banks went bankrupt.'
26. 'People lost their savings.'
27. 'Businesses failed.'
28. 'Factories shut down.'
29. 'Demand for goods fell even further.'
30. 'Unemployment rose sharply.'
31. 'People had no money for food or housing.'
32. 'The Wall Street Crash had a bad impact on Americans.'