-Consumerism- spend money to help the economy
-Buying on credit- buy now pay later
Republican Philosophy of Harding, Coolidge, Hoover
-Laissez-faire- government has to keep there hands out of the businesses
rugged individualism- do it yourself
trickle down theory- give tax breaks to the wealthy
-Stock- a part of a company
-Stock market- buy and sell stock
-Dow Jones Industrial Average- 30 largest companies in the united states. example- 3m, home depot, mcdonalds, nike, verizon, visa, walmart
-Buying on margin- buying stocks on credit
-Watered stock- overpriced stock
-Stock pooling- rich person buying for cheap and selling for a profit to the average person
-Speculation-with stocks- researching stocks
-income inequality- difference between the rich and poor
-Federal Reserve Board- created in 1913 under president woodrow Wilson, major goal was to stop banking panics, broke the country into 12 districts each with a federal reserve bank, banker's bank- stop bank runs, controls the amount of money in circulation, control inflation and deflation,
Causes of the stock market crash - 1929
stock prices were grossly inflated prices did not have real value- water stock prices
over speculation during the 1920
led to watered stock
buying on margin
led to people being in debt and watered stock prices
overproduction of goods
uneven distribution of wealth
too much borrowing for banks
federal reserve increased interest rates
lack of government regulation
effects of the sock market crash
investors and businesses lose millions of dollars
thousands of banks fail saving are wiped out
businesses cut production lay off workers
unemployment rises people quit spending money
great depression sets in
depression spreads to europe and other parts of the world
causes of the great depression
overproduction of goods
underconsumption of goods by consumers
agricultural slump due to overproduction
high protective tariff policies of the 1920s
taxes benefiting the rich- rich got richer- poor got poorer
stock market crashed
effects of the great depression
new deals programs astat makes the US government much larger
deficit spending starts
the new deal creates many organizations that are still around today social security welfare
fascist military and communist dictators come to power throughout the world
the vicious cycle of the great depression
companies lose money so they lay people off
unemployment rate goes up and less people buy goods as income has dropped
companies profits fall so they have to lay more people off or close
cycle repeats
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