1. Unit #8 The Great Depression of 1930s LESSON #8:1 The Crash of the Economy p. 232-236

2. LESSON #1 – The Crash of the Economy (2/23) VOCABULARY Herbert Hoover (232) Stock Market Bull Market (233) Speculation Buying on margin Margin call The Great Crash Black Tuesday (234) A bank run ESSENTIAL QUESTIONS 1.Why were so many people freely irresponsible with Stock Market investments? 2.Why did Stock Market prices keep rising, then drop sharply?

3. LESSON #1 – The Crash of the Economy (2/24) ESSENTIAL QUESTIONS 3.Why is a Bull Market good for investors? 4.Why can a long Bull Market become a problem? VOCABULARY Herbert Hoover (232) Stock Market Bull Market (233) Speculation Buying on margin Margin call The Great Crash Black Tuesday (234) A bank run

4. Wednesday, 2/3/16 American History – subject for today Lesson #1 – Economy crashes (continued) Essential Questions: 3.Why is a Bull Market good for investors? 4.Why can a long Bull Market become a problem? Homework No quiz this week

5. What does this graph tell you?

7. What does this picture tell you?

13. The Crash of the Economy Intro thoughts Mr. Jacoby will read six statements. On a scale of 1-10, give each a score.

14. Ponder questions 1.People should be free to invest their money however they want. 2.The government should force banks to guarantee much of the money the say they have. In other words, if you deposit $1,000 in a bank, they should guarantee that the $1,000 will be there when you want it. 3.The government should not regulate the investment industry. It should be free to lend freely, and invest freely. 4.Banks should hold most of their money in reserve. In other words, they should not be allowed to lend out money they don’t have. 5.Banks are smart if they take the money that is owed to them, and invest it in other markets to make a profit. Everybody gets richer that way. 6.When the stock market, real estate market, or any investment market starts gaining value too fast, the government should intervene to slow that growth down

15. Ponder questions response For your #2, 4, and 6, reverse your numbers. If you had a 7, now subtract that from 10, to get a 3. The higher your number is, the more risk you think Americans should be allowed It was this risk that led to the stock market crash, as well as the more recent.com crash and real estate crash Why would Americans like the ability to take risk?

16. Intro thoughts Then watch this… http://americanhistory.about.com/video/5- Causes-of-Great-Depression.htm And answer questions again…

17. THE CRASH OF THE ECONOMY https://www.youtube.com/watch?v=bgY48AHdVJ0 Watch this 10m intro vid.

18. The long “Bull Market” (reference p. 232-233) What was the 1920s like, that kept people gambling their money in the stock exchange? What is a Bull Market? What was buying on margin? Why did people just start selling their stocks in 1929? What happens at the “margin call? https://www.youtube.com/watch?v=fV4l5w0ZpcY

19. The Crash of the Market Reference p. 233 What does it mean that prices “peaked”? On Monday, Oct. 21, 1921 prices started falling Once prices started falling, speculators knew they earned as much as they could on “inflated” stocks What does “inflated” value mean? What happened on “Black Tuesday”? How much was lost? https://www.youtube.com/watch?v=FXNziew6C9A

20. The Collapse of the Economy The stock market crash only effected investors, not most Americans The way the banks were effected THEN hurt the average American What had banks done during the “long bull market” of the 1920s? When the banks were unable to collect on some of their investors, they stopped lending $$ to businesses. What were businesses then unable to do? If a bank could not survive the losses and had to close, what happened to your savings in that bank? What is a “bank run”? When depositors run to the bank to pull out their money before it collapses, often causing the bank collapse This started the collapse of the whole economy https://www.youtube.com/watch?v=bgY48AHdVJ0

21. Your analysis: Could anything have been done to prevent the crash of the stock market in October 1929? Could the depression have been prevented if the stock market never crashed?