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The Economy

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					The Economy


  1920-1930
The Economy Introduction
 The economy of a country refers to things
  like prices, jobs, wages and employment.

 The economy of a country changes from
  time to time. Boom years are when the
  economy is strong: plenty of jobs, good
  wages and low prices

 Recession years, and in extreme cases,
  depression years, are when jobs are scarce,
  many people are unemployed and people
  cannot afford to buy many things.
Economic Trends: 1900-1940
                                       Stock market Crash
                                       Currency drop

   Strong                    Roaring
                             20’s
                                         Great Depression
Economic
 Activity             ww1




    Weak                                               ww2


            1900   1910     1920       1930             1940
A Prosperous Economy
Boom Times
                      Demand for Goods
                           increases


  Higher Purchasing                       Higher Production
       Power              The Boom
                            Times

  Greater Profits                           Higher Production



                      Higher Employment
1920 – The Confident Years
 A time of confidence and growth
 “easy street” buy now, pay later
 overproduction of goods
A Depressed Economy
 Depression
                    Demand for Goods
                         goes down


  Less Purchasing                      Lower Production
       Power
                      The Great
                      Depression

   Less Profits                          Fewer sales



                        Loss of jobs
The Great
Depression
What causes the
  economy to
  change from
  prosperity to
  depression?

Nobody knows for
  sure.
The
Great Depression
Other Causes:

1. Low European
   currency
2. Overproduction of
   goods
3. Stock Market
   Crash
The Stock Market Crash
October 1929
    On October 24, 1929 investors panicked when shares
    purchased on margin (with borrowed money) began to
    decline in value.


    Many dumped (put up for sale) their stock before the prices
    went even lower.


    The extra stock that were for sale created a surplus causing
    the prices to fall even lower – eventually below margin.


    Eventually stock were worth less than what people had
    borrowed to buy them. People went broke!
1930’s –
The Bust Years
 much doom and
  gloom

 little faith in the
  economy or the
  government

 factories closed
  making jobs hard
  to find
1930’s – The Bust Years cont.
 world demand and the
  prices for Canada’s
  natural resources
  collapsed

 Those that had
  borrowed money
  (bought shares on
  margin) had to pay
  back what they had
  borrowed (margin call)
  – even though their
  shares were now
  worth nothing – many
  bankruptcies

				
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posted:8/29/2012
language:English
pages:11