Relevant Economic Terms STOCK: (also known as an equity or a share) is a portion of the ownership of a corporation. A share in a corporation gives the owner of the stock a stake in the company and its profits. If a corporation has issued 100 shares of stock in total, then each stock represents a 1% ownership in the company.
Relevant Economic Terms DISCOUNT RATE: the interest level charged by the Federal Reserve for money it loans to member banks. Since its establishment in 1913, the Federal Reserves ability to manipulate the discount rate had given the Fed a powerful influence in the US economy.
Relevant Economic Terms WELFARE STATE: a nation that provides for the basic needs of its citizens, including such provisions as old-age pensions, unemployment compensation, child-care facilities, education, and other social problems.
Why did Americans Invest? Rising Stock Dividends Increase in personal savings Relatively easy money policy Companies invested their over-production profits into new production Lack of stock market regulation Psychology of Consumption