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Interdisciplinary Activities CHAPTER 12 • SECTION 3 CONNECT Economics and History THE BUSINESS CYCLE CONNECT Economics and History The pattern of ups and downs in the economy is called the business cycle. THE BUSINESS CYCLE Economists track Expansion Businesses patterns in business in order to make more Peak Consumer spending, increase production and hire accurate predictions about future activities. employment, and business more workers. Consumers production are at a high. Why would analysts be interested in future spend more. activities? (Possible Answers: to prepare for a potential recession; to determine if it’s safe to invest money now without losing it later) CRITICAL THINKING ANSWER Draw Conclusions When consumers spend less money, businesses and manufacturing decline; when consumer spending is higher, businesses order more Low Point Consumer spending, employment, and business goods, and manufacturing increases. Recession Consumers spend less. Businesses lay off workers and cut production are at a low. spending. Profits decline. A severe Unit 5 Resource Book and extended recession is called a • Economics in History, p. 28 depression. CRITICAL THINKING More About . Draw Conclusions In what ways can the amount people spend affect businesses? The 1832 Presidential Election Jackson won reelection in 1832 with 55 percent of the popular vote while his leading opponent, Henry Clay, received just Jackson’s War on the Bank When Congress voted to renew the charter, 42.4 percent. However, with the electoral Jackson vetoed the renewal. Although the Supreme Court had ruled that the bank was constitutional, Jackson argued that it was not. He said it was a voting system in place, Jackson’s victory monopoly that favored the few at the expense of the many. was even more dramatic. Jackson received The bank became the main issue in the presidential campaign of 1832. 219 electoral votes to just 49 votes in favor The National Republican candidate, Henry Clay, called Jackson a tyrant. The of Clay. As in the 1828 election, Jackson’s Democrats portrayed Jackson as a defender of the people. When he won enormous popularity won over citizens in reelection, Jackson took it as a sign of approval for his war on the bank. New York, Pennsylvania, and nearly every Jackson set out to destroy the bank before its charter ended. He had Southern state. government funds deposited in state banks. Biddle fought back by making it harder for people to borrow money. He hoped the resulting economic troubles would force Jackson to return government deposits to his bank. Instead, the people supported Jackson. Eventually the bank went out of busi- ness. Jackson had won the war, but the economy would suffer for it. 410 Chapter 12 INTERDISCIPLINARY ACTIVITIES CONNECT to Music CONNECT to Language Arts Create and Perform Create a Cause-and-Effect Chain Campaign Jingles As a class, review the “Connecting Economics Have students work in small groups to come & History” feature on p. 410. Answer any up with campaign jingles for both presidential questions students might have about the candidates in the 1832 election. Jingles should business cycle. Then have students create a be brief, yet should reflect each candidate’s cause-and-effect chain on the board. Have beliefs about the national bank. Jingles should volunteers take turns drawing boxes with arrows also mention which party each candidate in between them. Within the boxes, students represents. Remind students that jingles should should paraphrase each step of the business be simple and catchy. Allow time for students cycle. Finally, have students quiz each other by to practice performing their jingles. Then have asking questions about the business cycle. each group perform their jingles for the rest of the class. 410 • Chapter 12 Prosperity to Panic Because Jackson’s state banks made it easier to borrow CHAPTER 12 • SECTION 3 money, many people took out loans. The economy boomed. But the banks issued too much paper money, and the rise in the money supply made each dollar worth less. Inflation, or an increase in prices and a decrease in the value of money, was the outcome. To fight inflation, Jackson issued an order that More About . required people to pay in gold or silver for public lands. Jackson left office proud of the nation’s prosperity. But it was puffed-up The Panic of 1837 prosperity. Like a balloon, it had little substance. Jackson’s popularity helped Van Buren win the presidency in 1836. A few months after Van Buren took Effects of the Panic of 1837 lasted well into office, a panic, or widespread fear about the state of the economy, spread the 1840s. Van Buren took little action to throughout the country. It became known as the Panic of 1837. stabilize the economy, believing that the People began exchanging paper money for gold and silver. Banks quickly power of the federal government should be ran out of gold and silver. A depression, or severe economic slump, followed. limited. As years of depression passed by Almost all factories in the East closed. Jobless workers had no way to buy with no help in sight, even close friends of food or pay rent. People went hungry and became homeless. Van Buren began to doubt the president’s SUMMARIZE Explain how Jackson destroyed the national bank. ability to resolve the issue. Answer: by vetoing its charter and having government funds deposited in state banks Analysts called for the creation of a new national bank to help manage the economy, but Van Buren refused. He authorized the movement of federal money from state banks into a national treasury, but this CONNECT to the Essential Question did not improve the economy. By the time Congress passed an independent treasury What impact did Andrew Jackson’s presidency bill in 1840, the economy had finally begun have on the nation? to recover. EVENT IMPACT Voting rights expand; Jackson’s win Election of 1828 hailed as victory for the common people CONNECT to the Essential Question Sectional tensions grow over tariffs and states’ Tariff of Abominations rights; Jackson opposes nullifi cation; South What impact did Andrew Jackson’s Carolina nullifi es tariffs and threatens to secede presidency have on the nation? Thousands of Native Americans are removed Indian Removal Act from their homeland; Cherokees suffer on the Ask students what they have learned so far of 1830 Trail of Tears that can help them answer this question. Use the graphic on this page or display the Jackson drives the Second Bank out of business; Bank War infl ation rises transparency: Jackson’s popularity and the nation’s prosperity Election of 1836 Unit 5 Resource Book help Vice-President Van Buren win the presidency • Essential Question Graphic, TT5 When answering this question, students CRITICAL THINKING might mention: 1. Form and Support Opinions What do you think was the most important issue in Jackson’s presidency? Why? • Jackson forced the national bank to close, 2. Evaluate In what ways did Jackson continue to affect politics after his presidency had ended? which caused inflation. • Inflation led to the Panic of 1837, which in The Age of Jackson 411 turn caused a depression. • The Whig Party was formed in hopes DIFFERENTIATING INSTRUCTION: TIERED ACTIVITIES of displacing Jackson’s successor, Van Buren, with a president who would better represent the will of the people. OBJECTIVE Write a letter to the editor that discusses the bank crisis and the depression that followed. The letter should be from the viewpoint of someone who lived at the time. CRITICAL THINKING ANSWER 1. Form and Support Opinions Basic On Level Challenge Possible Answer: expanding voting Using information from Using information from the Using information from the rights, because that issue affected all Section 3, students create chapter, have students write chapter, reference books, future elections an annotated time line of at a letter to the editor that and the Internet, students 2. Evaluate Jackson’s policies had least four events that led to discusses the major events write a letter to the editor long-term effects on the economy, the depression that followed and personalities that led that gives more details on Native American life, and political the Panic of 1837. Students to the depression following the battle between Jackson parties, and the American concept of incorporate that information the Panic of 1837. The writer and Biddle over the bank. democracy. into a letter to the editor should give examples of how The writer should give his written by someone living the depression has affected or her opinion on who, if either in the South, North, his or her life. anyone, is to blame for the or West. depression that followed. Teacher’s Edition • 411 CHAPTER 12 • SECTION 3 The Birth of the Whigs KEY QUESTION In what ways did the Whig Party differ from the Democrats? Van Buren faced a new political party in his campaign for reelection in 1840. The Whig Party had been formed by Henry Clay, Daniel Teach Webster, and other Jackson opponents. It was named after a British The Birth of the Whigs party that opposed royal power. The Whigs opposed the concentra- tion of power in the chief executive—whom they mockingly called “King Andrew” Jackson. Think, Pair, Share This 1840 campaign Political Beliefs The Whigs believed that Congress, not the presi- • Why was Jackson nicknamed “King Andrew”? banner shows a log cabin as a symbol of dent, represented the will of the people. They also blamed Van Buren for not (Whigs felt he wanted too much power.) the frontier. The banner doing more to help the economy during the panic. In 1840 the Whigs chose describes Harrison as William Henry Harrison of Ohio as a candidate for president and John Tyler as • Sequence Events List these presidents in “The Ohio Farmer” his running mate.
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