Monday not in class, Tuesday went through vocab, Wednesday not in class, Thursday talked about Wednesday, Friday went over depression.
Consumerism- people should spend as much as they can to help with the economy.
Buying on credit- Buy now pay later.
Republican Philosophy of Harding, Coolidge, Hoover
Laissez-faire- let them be, the government to stay out of businesses. Rugged individualism- one that believes it's up to you. Trickle down theory- The government will give tax breaks to the rich. The rich will start businesses and hire the poor.
Stock
Stock market- buy and sell stock
Dow Jones Industrial Average- American Express, Coca Cola, Home Depot, McDonalds, United Health. 30 Largest companies
Buying on margin- buying stocks on market.
Watered stock-
Stock pooling- rich people would buy cheap stock, so then they sell it for more.
Speculation-with stocks
Income Inequality-
Federal Reserve Board- This board that runs the system. Major goal was the stop banking panics. Broke the country into 12 districts each with a Federal Reserve Bank.'
Causes of the Stock Market Crash- (1929) Stock prices were grossly inflated, did not have real value-watered stock prices. Over speculation during the 1920's Led to watered stock. "Buying on margin" Led to people being in debt and watered. Overproduction of goods. Uneven distribution of wealth. Too much borrowing from banks. Federal Reserve increased interest rates. Lack of government regulation.
Effects on the Stock Market-
- Investors and businesses lose millions of dollars.
- Thousands of banks fail-savings are wiped out.
- Businesses cut production
- Unemployment rises people quit spending money.
- Great Depression sets in.
- Depression spreads to Europe and other parts of the world.
Causes of Great Depression
- Overproduction of goods.
- Under consumption of goods by consumers.
- Agricultural slump due to overproduction.
- High protective tariff policies of the 1920's.
- Taxes benefiting the rich, rich got richer, poor got poorer.
- Stock market crash.
Effects of the Great Depression
- New Deal programs start-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.
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