The Wall Street Crash had a great impact on the USA.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

1. [1-4] e.g. 'It was a shanty town.'
2. [1-4] 'A Hooverville was a camp built on the edge of a town or city to house people made homeless during the Depression.'
3. [1-4] 'It was a makeshift town of homes built of materials that were easily salvaged.'
4. [1-4] 'Hoovervilles had no running water or sewage systems.”
5. [1-4] 'They were named after President Hoover.'
6. [2-3] 'Many Americans were forced into bankruptcy.'
7. [2-3] ‘There were many bank closures.'
8. [2-3] ‘There was a fall in demand for goods at home.'
9. [2-3] 'Other countries cut back on buying American goods.'
10. [2-3] 'Businesses cut back production and staff.'
11. [4-5] e.g. 'After the first series of business and banking failures, the whole economy had to adjust to a reduction in trade and demand for American goods. Businesses had to reduce their operations by sacking workers and reducing the wages of those who remained. It became a vicious cycle as these actions took even more money out of the economy and further reduced the demand for goods. This meant that unemployment increased even more.’
12. [2-3] 'The economy had boomed during the 1920s.'
13. [2-3] 'Many consumer items had sold well in the 1920s.'
14. [2-3] 'Share prices kept rising throughout the 1920s.'
15. [2-3] 'Speculators had made huge profits.'
16. [2-3] 'Investors did not realise the economy was slowing down.'
17. [2-3] 'The market was reaching saturation point.'
18. [2-3] 'Many Americans could not afford to buy consumer products.'
19. [2-3] ‘There was overproduction.'
20. [2-3] 'There were signs in 1927 that demand was decreasing and car sales were declining.'
21. [4-6] e.g. 'The Wall Street Crash was a great surprise for some investors. The 1920s had been boom years for the American economy. Consumer items such as cars and radios had sold in huge numbers. Industries made huge profits and some shareholders grew wealthy. Many investors did not notice the fall in profits and production in 1928. Some had bought shares on credit expecting to sell them and make a profit. These speculators were caught by surprise in 1929 when some investors decided that the market was going to fall and started to sell their shares. This caused a panic which resulted in a dramatic decline in share values.'
22. [4-6] OR e.g. 'On the other hand, it was not surprising that the Wall Street Crash occurred. There were signs that the economy had reached saturation point. Americans with money had already bought a car, fridge and other domestic appliances and did not need to keep buying more. Also, as many as 60% of Americans still lived in poverty and could not afford to buy new domestic products in the first place. This all meant that demand was reducing, profits would decline, and the value of shares would fall.'