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The Great Depression

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									The Great Depression
    United States History
         Chapter 14
                 4 Causes of
            the Great Depression
1.       Poor economic policies
          details


2.       Widespread dependence on credit
          details


3.       Uneven distribution of wealth
          details


4.       Poor world economy
          details
                Buying on Margin
   Say you have saved            Regular          On Margin
    $100 to invest                Buy 10 shares    Buy 100 shares
                                  @ $10/share -    @ $10/share -
       $100 – 10 shares @        $100             $100/$900 debt
        $10/share
       Buy it on margin and it   Sell 10 shares   Sell 100 shares
        becomes:                  @ $20/share -    @ $20/share -
         • 100 shares @           $200             $2000
           $10/share - $1,000
           value, debt - $900     Profit of $100   Pay $900 debt,
                                                   profit of $1,000
       Greed --- Capitalism!
 If you did NOT buy on margin you now see
  friends with greater profit – you want that
  kind of money, encourages you to BoM!
 If you DID BoM, you now have $1,000 to
  spend which =s $10,000 worth of stock!
 The more you risk – the more you make!
 …Or ???
      The Crash – October, 1929
 Black    Thursday, October 24, 1929
     Investors, for a variety of reasons began to dump
      stocks, prices plummeted.
     Big names loudly, publicly buy stocks to give America
      a boost of confidence in the market…lasts short time
 Black    Tuesday, October 29, 1929
     Massive sell-off, people saw prices stabilize so they
      dumped, 16 million shares traded in one day!
     Market was decimated, the Great Depression begins
1. What does the
   cartoonist suggest
   will happen to
   individuals because
   of the crash?
2. How does the
   cartoonist convey
   the sense of fear
   and shock?
3. What do the looks
   on people’s faces
   indicate about the
   impact of the crash?

								
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