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Bust_ Boom and Bust

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					        Bust, Boom and Bust

• Canada began the 1920’s in a state of
  economic depression and jobs were scarce
• There was lots of Inflation, as more
  money was printed, which reduced the
  overall value of money
• By mid decade, the economy was booming,
  fueled by growth in exports of natural
  resources and manufacturing
• The USA invested heavily in Canada and
  opened branch plants to get around
  Canadian tariff walls
• New technology made life better such as
  cars, telephones and radio
• A new Canadian art genre was created by
  the Group of Seven and Emily Carr
• (But the good life was not to last… )
                      The Crash
• The stock market fueled much of the prosperity of
  the 1920’s
• People were encouraged to invest in the market,
  many did so buying on margin (buying on credit)
  because people thought they would get rich quick
  and pay back the interest
• It was assumed stock prices would keep increasing
• Easy to obtain credit was also being used to buy
  consumer goods as well
    – Too much use of credit and buying on margin created a
      “bubble”
• Industry and farms were over producing, relying on
  very high consumerism
• In October 1929, people started to sell their shares
  as the value of stocks fell and the “bubble”
  collapsed
• Many people who borrowed to buy shares went
  bankrupt, and the banks were unable to support
  the unpaid loans so they also went bankrupt
• This marks the beginning of the Great
  Depression, a time of hardship and
  unemployment
• People were unable to buy goods, which caused
  factories and farmers to lose lots of money

				
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posted:8/15/2012
language:English
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