Today consisted of a class discussion on the causes of the stock market crash.Today we started off the class period by looking at a graph of the Dow Jones Industrial Average from 1921-1929. We also looked at a graph over the great depression and went over the depression cycle. (consumption-production-employment-income). Before i forget, we also did a quiz about the video we watched yesterday. We had to write 5 facts about what made the roaring 20's so exciting and fun.A few reasons for the stock market crash:People were buying on credit and were in debt so by the end of the 20's people were not buying things.In 1929 the Federal Reserve System raised interest rates in effort to make more money, but it just resulted in them making less money because nobody was borrowing any money anymore.People were not buying stuff because they already had a lot of the stuff that they needed.People would buy stocks on margin.Companies were failing.Stock prices inflated. Didn't have any value.Uneven distribution of wealth in the 20's.Great depression set in.
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