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The Downward Spiral The Stock Market Crash Chapter 22 Section 1.

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Presentation on theme: "The Downward Spiral The Stock Market Crash Chapter 22 Section 1."— Presentation transcript:

1 The Downward Spiral The Stock Market Crash Chapter 22 Section 1

2 Quick Review: Why did American’s have such confidence in the economy in the 1920s? What potential investment dangers were seen in the late 1920s? What were conditions like for farmers?

3 Black ________ —October 29, 1929 16.4 million shares sold—compared to 4- 8 million normally Race to get _________ out of the stock market –Prices continued to fall in the “_____ ______” By Nov. 13, overall losses totaled $30 billion –Many went from ______ to _____ For some, life savings as well as borrowed money had “melted” away.

4 The Market Crashes Stock prices as popular as Homeruns Prices soar above the company’s _____ ______ ______ Thursday—Oct. 24, 1929 –____ _______ falls 21 points in an hour –Bankers pooled together to stop the _____ They were able to hold the market...for a few days

5 The Business Cycle

6 Millions Affected The First to Suffer –4 million US _________ (pop. 120 million) The Crash triggered the “_______ _________” Severe Economic ______ from 1929 until 1941 If only just over 3% were invested in the market, how could it affect so many?

7 Impact _________ Lost Money Could not pay back _______ _____ were forced to close 9 million ________ _______ vanished Called in _____ of non- investors Left with nothing “____” on the Bank

8 Impact _________ Lost Money Had no _______ to buy goods Factories had to cut back _________ Millions left ________ or ____________ By 1932, 12 million were unemployed GNP fell from $103 billion in 1929, to $56 billion by 1933 Small businesses closed House servants dismissed Farm prices plummeted

9 Impact Investors Lost Money Could not support _______ markets America called in ____ ______ and raised tariffs Europeans could not afford to buy ________ _______ Allies had to rely on German reparations for income Could not invest in Germany, so German reparation payments ceased Sparked European Depressions

10 Why did this happen? ______________ Too much stock was bought on _______ with unstable collateral Limited Money in ___________ The Gov’t wanted to stop overspeculation so they cut back on the amount of _______ ________ After Crash, not enough money in _________ to bring America back up ________ Economy National wealth was unevenly __________ Industry produced more than __________ could afford ________ and ________ had not shared in the boom

11 In Review: What events led to the stock market’s Great Crash in 1929? Why did the Great Crash produce a ripple effect throughout the nation’s economy? What were the main cause of the Great Depression?

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