Today, in class, we got on the computers and we watched some video.
1. What is pooling?
Wealthy investors would pool their money to purchase a bunch of stocks to jack up the prices then sell them to unsuspecting investors. They would also pay newspapers to write exciting stories about the company to attract interest for potential investors.
2. What was the Federal Reserve Board’s take on the booming stock market?
They distrusted it as they found it was reckless and dangerous as it was based on borrowed money.
3. What did the Federal Reserve Board do to prevent the crash?
They did nothing at first (laissez faire), which caused people to panic. If they rose interest rates, people would quit borrowing.
4. What did Charlie Mitchell and several other Wall Street tycoons try to do to stop the crash?
He decided to provide money (20-25 million dollars) to let people borrow, bringing the stock market prices back up.
5. What were the causes of the stick market crash based on the video?
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