AP®︎ European History: Topic 8.5 Flashcards

Worldwide economic collapse beginning in 1929 that caused bank failures, falling production and trade, deflation, mass unemployment, and growing political extremism

French and Belgian occupation of Germany’s Ruhr industrial region in 1923 after Germany fell behind on reparations, provoking German passive resistance and accelerating inflation

Collapse of the German mark caused by postwar fiscal breakdown and money printing during the Ruhr crisis; it destroyed savings, weakened confidence in Weimar, and ended with the Rentenmark

1924 plan that reorganized German reparations, reduced immediate payments, and promoted American loans to Germany, producing temporary but credit-dependent stability

1929 plan that reduced and rescheduled Germany’s remaining reparations just as the global financial crisis began dismantling the payment system

Production exceeding what consumers could purchase profitably, leading to falling prices, reduced output, layoffs, and still weaker demand

Tariffs and import restrictions intended to protect domestic producers but which provoked retaliation, reduced world trade, and obstructed international debt repayment

A policy of pursuing national economic self-sufficiency rather than relying on international trade

Monetary system tying currencies to gold at fixed rates; governments defending it often raised interest rates and cut spending, worsening deflation and unemployment

Purchasing securities or other assets in expectation of continued price increases, creating financial vulnerability when prices fell

Purchasing stocks with only a partial payment while borrowing the remainder, magnifying both profits and losses

October 1929 collapse in American stock prices that destroyed wealth and confidence and triggered the withdrawal of American capital from Europe

Failure of Austria’s largest bank in May 1931 that spread panic through central European banks and currencies and helped force Britain off gold

A sustained fall in prices and incomes that increased the real burden of fixed debts and contributed to bankruptcies, restricted credit, and unemployment

Emergency coalition formed under Ramsay MacDonald in 1931 that preserved parliamentary rule and pursued currency, tariff, and financial measures producing partial recovery

Democratic cooperation among social democrats, labor, farmers, employers, and the state through public works, welfare, collective bargaining, and support for purchasing power

Antifascist electoral alliance of Socialists and Radicals, supported by Communists, that brought Léon Blum to power in 1936 and enacted labor reforms without securing recovery

June 1936 French agreements that recognized collective bargaining, raised wages, and strengthened workers’ rights during the Popular Front government

Postwar payment chain in which American loans funded German reparations to France and Britain, which used the money to repay war debts to the United States

Reduction and recall of American loans after the 1929 crash that destabilized European banks, businesses, and the debt-and-reparations system, especially in Germany

Keynes’s theory that insufficient aggregate demand can prolong unemployment and that governments should borrow and spend during downturns to support demand and employment