Intro to The Great Depression & the New Deal

Question 1

Economic issues:

Answer 1

a. Manufacturing is overproducing but doesn’t know b.
b. Stock market coming up, getting wealth is easier
c. New stock called margin/buying margin
I. Only raise a little and make a lot
Ii. Pay back money loaned & a little more but keep all after
Iii. Works as long as stock goes up

Question 2

c/e: CAUSE- Brokers have to deal with paying people if stock goes down

Answer 2

c/e EFFECT-
* The more people buy, the more price goes up
* Stock market thinks more cash is rising than it is

Question 3

c/e: CAUSE- Black Thursday

Answer 3

c/e: EFFECT-
a. Stocks sold, go get money, banks don’t have money on hand
b. Brokers panic because they can’t get paid
c. Even people who don’t have stocks can’t get their money
d. Banks close

Question 4

What happened on Black Thursday?

Answer 4

Economy goes from highest economy to catastrophe