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Published byJasmine Roswell
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1920s Boom & Crash The Stock Market
Origin of the term stock Comes from the early days when corporations were called joint stock companies Stock mean the total sum of goods or raw materials on hand for trade
Men pooled their stock such as ships, goods, employees, building to form a large business Today the word capital is used to describe what once was called stock
What is a share? A share is a certificate of partial ownership in a joint stock company A share can be bought and sold
Stock A certificate of ownership in a corporation
Definition of the Stock Market A place where stocks and bonds are bought and sold.
Economic growth An extended period of time during which the economy expands existing businesses expand new businesses are created more jobs are created
Recession A prolonged period in which the economy contracts
Depression A recession that is especially long and severe
Recovery Economic contraction stops and expansion once again takes place
Recession Recovery Depression Stock Market Terminology GrowthRateGrowthRate Time Growth
The Bear Market A market in which prices fall over a period of 6 months
The Bull Market A market in which prices rise over a period of 6 months
They need money to: Start Run Expand Why do businesses sell stock?
Wendys wants to build more restaurants or add a buffalo wings to its menu. It takes money to buy land, build restaurants, and develop and advertise new menu items. Example:
Where Wendys get money? Use own capital ($) Borrow from bank Sell stocks on the stock market
Why not use your own money? Not enough Too risky
Why not borrow from a bank? High interest rates Stringent regulations Collateral required to guarantee the loan
Why sell shares of stock? Fewer regulations Share risk with investors
Savings account Invest in Stock Market How can you use your money to make money?
Why a Savings Account? Earn interest Low risk Government Insurance - FDIC (Federal Deposit Insurance Corporation)
Invest in the Market? Earn dividends - share of the profit Speculate - buy low/sell high Risk No insurance
1920s Market No government regulations Buy on margin (Borrow $) Easy credit from banks Speculation v. investments
1920s Market Rise & Fall
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1929 Stock Market Crash What IS the Stock Market? Post WWI Economic Prosperity 1920s Stock Market Activity Legacy of WWI Public Perception.
CAUSES OF THE GREAT DEPRESSION What caused the most severe economic crisis in American history?
Chapter 11: Financial Markets Section 3
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In this Unit We Will: Know the difference between saving and investing Be familiar with the time value of money Be able to compare investment options.
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Stock Market Mr. Biddle Survey of Social Studies.
Financial Markets. Private Enterprise and Investing Investment is the act of redirecting resources from being consumed today so that they may create benefits.
2.03 PowerPoint Objective 2.03 Explain how the Federal Reserve, Stock Market, and e-commerce impact the United States’ economic system.
Financial Markets. Saving & Investing Investment: the use of assets to earn income or profit. – Ex. Paying for college. Financial System: the system that.
Central Bank of the United States Regulates the money supply in the US economy › Raises and lowers the discount interest rate › Puts money into circulation.
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