Lecture 19 - Key Terms and Questions

Question 1

The name of the financial charlatan from the 1920s who attracted poor immigrants to his bank with promises of high interest rates which he paid from the inflow of new deposits was _____ (Reading Question)

Answer 1

Charles Ponzi

Question 2

You have borrowed $90 and invested $10 of your own money to buy a share of Dayton Wire Wheels. If the stock rises to $105 you can make a quick profit of _____ % on your investment

Answer 2

50%

Question 3

In the late 1920s many stock market investors came to believe that the economy had entered a “New Age” of high growth and prosperity because, according to the class lecture, ____.

Answer 3

technological progress had been accelerated by the establishment of industrial laboratories

Question 4

Which of the following statements describes the Federal Reserve in the summer before the stock market crash of 1929? “The Federal Reserve _____.”

Answer 4

was worried about the stock market so it raised interest rates

Question 5

In class I argued that the main way that the stock market crash of 1929 contributed to the onset of the Great Depression was by reducing ____ because the crash ____.

Answer 5

purchases of consumer durables, created uncertainty about the future.

Question 6

What is going on in this picture?

Answer 6

The Florida Land Boom illustrated by Marx Brothers’ film Cocoanuts.