2. 1. She was the first to fly solo nonstop across Atlantic
2. Added to the Constitution that legalized alcohol
3. The women of the 20s became known as
4. Term for an illegal bar or underground
5. He was the first to fly solo nonstop across Atlantic
6. The largest bootlegger that created an empire in Chicago
by killing his competition
7. List three things that describes the women of the 20s
8. Added to the Constitution that ban the sale and
manufacture of alcohol
9. He was a baseball legend who hit 60 homers
10. Term for smuggling alcohol illegally
4. What happens to the price of items as the demand
increases?
What happens to the price if the demand decreases?
Demand = Price
Demand = Price
5. The Law of Supply and Demand
Honus Wagner
baseball card
(1909 )
Demand
Only 50 – 60
Honus
Wagner
baseball
cards exist in
the world.
+
+
Supply
=
=
Price
The card is
valuable
because of its
scarcity. In
2007, a mint
copy was
sold for
$2.35
million.
6. The Law of Supply and Demand
Hannah
Montana
stickers
Demand
Available
almost
everywhere.
+
+
Supply
=
=
Price
Even though
there is a
large
demand,
there is a
lack of
scarcity.
Sells for
$1.50.
7. The Law of Supply and Demand
A small pile of
dirt.
Demand
Available
almost
everywhere.
+
+
Supply
=
=
Price
No scarcity
and no
demand.
Therefore,
this pile of
dirt is
virtually
worthless.
8. The Law of Supply and Demand
GI Joe
Action Figure
(1964 )
Demand
In “good”
condition.
+
+
Supply
=
=
Price
A 1964 GI
Joe in good
condition is
relatively
scarce. This
one is for
sale on Ebay
for $350.00
9. The Law of Supply and Demand
British poster during
WWI asking people
to preserve food.
Demand
U.S. farmers
sold farm
products to
the European
powers in
large
numbers.
+
+
Supply
=
=
Price
Due to an
increase in
scarcity, the
price of U.S.
farm goods
increased.
10. How does the stock market work?
You buy 100 shares of stock of
x $5.00 per shareHow much money
have you invested? $500.00
Scenario #1
stock increases to $20 per share
100 shares of stock
x $20.00 per share
How much are your 100
shares of stock now worth?
$2,000.00
How much profit have you
made?
$2,000.00 stock value
- $500.00 initial investment
$1,500.00 net profit
11. How does the stock market work?
You buy 100 shares of stock of
x $5.00 per shareHow much money
have you invested? $500.00
Scenario #2
stock decreases to $1 per share
100 shares of stock
x $1 per share
How much are your 100
shares of stock now worth?
$100.00
How much money have you
lost?
$100.00 stock value
- $500.00 initial investment
$400.00 net loss
12. Buying Stocks on Margin: Scenario A
investor stock broker
Hello, sir. I
would like to
purchase 100
shares of stock
in the Ford
Motor
Company. How
much is it going
to cost me?
13. Buying Stocks on Margin: Scenario A
investor stock broker
Well, Ford
stock costs
$10 per
share. You
want to
buy 100
shares?
Figure it out
yourself,
smartguy!
14. Buying Stocks on Margin: Scenario A
investor stock broker
Ummm…
100 shares
x $10 per share
= $1,000.00
Oh, well. I only
have $100. I can’t
afford 100 shares.
15. Buying Stocks on Margin: Scenario A
investor stock broker
No, problem!
Just give me
$100 and you
can owe me
the rest!
16. Buying Stocks on Margin: Scenario A
investor stock broker
Like, how much
would that be?
Let me think…
$1,000 worth of stock
- $100 paid
= $900 owed
Alright, it’s
a deal!!
17. Buying Stocks on Margin: Scenario A
investor stock broker
Six months later, Ford stock doubles to $20 per share.
My 100 shares
are now worth...
100 shares
x $20 per share
$2,000
18. Buying Stocks on Margin: Scenario A
investor stock broker
That’s great!
Now pay me
the $900 you
owe me!
19. Buying Stocks on Margin: Scenario A
investor stock broker
No problemo! It
was a pleasure
doing business
with you!
20. Buying Stocks on Margin: Scenario A
investor
Now let’s figure out how
much money I made!
$2,000 net worth
- $900 owed
$1,100 profit
- $100 initial investment
$1,000 net profit
I’ll pay the debtor
when I make
more…it’s only
$900. I already
have $2000
anyway..
21. Buying Stocks on Margin: Scenario B
investor stock broker
Six months later, Ford stock decreases to $1 per share.
My 100 shares
are now worth...
100 shares
x $1 per share
$100
22. Buying Stocks on Margin: Scenario A
investor stock broker
Too bad,
hotshot! You
still owe me
$900!
23. Buying Stocks on Margin: Scenario A
investor stock broker
But I’m broke!
What am I going
to do!
24. Located in lower
Manhattan, New York.
It is a street that
features many large
financial office
buildings and
companies where
stocks are traded,
including:
NYSE New York Stock Exchange,
NASDAQ
,
AMEX American Exchange,
NYMEX New York Mercantile Exchange,
NYBOT New York Board of Trade
etc.
25. Wall Street
New York Stock Exchange. Stocks and shares
are bought and sold
Located in Wall Street
Nation marketplace
26. People buy (and
“invest”) stocks and
shares to earn
$MONEY$. They
believed money would
“multiply”.
Buying stocks at LOW,
and selling at HIGH.
For example, when
1,000 shares of stocks
is put into $1.00 worth
stocks that rise to
$1.50, $500 is earned.
27. “If a man saves $15 a
week, and invests in good
common stocks, and allows
the dividends and rights to
accumulate, at the end of
twenty years he will have at
least $80,000 and an
income from investments of
around $400 a month. He
will be rich. And because
income can do that, I am
firm in my belief that
anyone not only can be
rich, but ought to be rich.”
– John J. Raskob
John J. Raskob
28. Major investor Will Payne,
stated that the Wall Street
Stock Exchange had become
such an easy way to make
money that it ceased to be a
gamble, because in a gamble,
someone loses – but when
invested in stocks and shares,
“everybody wins”.
People thought the market
could sustain the growing high
prices, “Stock prices have
reached what looks like a
permanently high plateau.”
– Irving Fisher.
Irving Fisher
29. People begun to
speculate (buying
on stock in hope to
make quick profit,
ignoring risk)
people began to
buy stocks on
margin, (pay on
installment).
30. Stocks rose by 65%.
Wages increased by 25%.
People began borrowing
money to invest.
• On Thursday, October 24,
1929, some nervous
investors began selling their
stocks and others followed,
creating a huge sell-off with
no buyers
• Stock prices plunged,
triggering an even greater
panic to sell.
• Black Tuesday, October 29,
1929 Stock Market Crashes
+65%
+25%
America’s wealth in the 1920’s
UH
OH!
• On October 24th, 12,894,650 shares
were sold, setting the record in its time.
Then, on October 29th, approximately
16.4 million shares were traded,
breaking the record that was set 5 days
earlier,
32. 1. Unequal distribution of
income, too little money in
the hands of working
people.
2. Availability of easy credit
(installment plans)
3. Decrease in demand of
durable goods (product
that last several years)
4. More competition due to
new inventions
5. Crisis in the farm sector–
OVERPRODUCTION
(produce more than they
could sell)
Causes of the Great DepressionCauses of the Great Depression
• The wealthiest one
percent income grew
75 percent, but the
average worker saw
under a 10 percent
gain.
• rising prices swallowed
up any increase in salary
• 70 percent of U.S.
families had too low an
income for a good
standard of living.
• Four out of every five
families couldn’t save any
money during the so-
called boom years.
Credit allowed
Americans to buy
expensive goods,
but by the end of
the decade many
people reached
their credit limits,
and purchases
slowed.
Warehouses
became filled
with goods no
one could afford
to buy.
33. brokers
demanded
investors to
pay back loan
investors
forced to sell
their stocks for
far less than
they had paid,
3rd
Sep,
1929
13th
Nov,
1929
% loss
American
Can
$1.82 $0.86 53%
Anaconda
Copper
$1.62 $0.70 57%
Electric B&S $2.04 $0.50 77%
General
Electric
$3.96 $1.68 58%
General
Motors
$1.82 $0.36 80%
New York
Central
$2.56 $1.60 38%
Radio $5.05 $0.28 94%
US Steel $2.79 $1.50 46%
Westinghous
e E&M
$3.13 $1.02 67%
Woolworth $2.51 $0.52 79%
34. Effects on Banks
• frightened depositors rushed
to withdraw their money,
draining the bank of funds.
• When investors couldn’t
repay margins, banks lost
money, too.
• 6,000 banks closed.
•Many banks themselves had invested directly or
indirectly in the stock market by buying
companies’ stocks or by lending brokers money
to loan to investors on margin.
•Bank closures wiped out
billions in savings by 1933.
35. Impact on
Business
• Businesses crashed,
because banks
couldn’t lend
money.
• Consumers cut back
their spending on
everything but
essentials,
36. thousands of farm
foreclosure ( when
an owner cannot
pay for their
mortgage and the
bank repossesses
the property to sell
it.)
37. companies were
forced to lay off
workers when
demand decreased.
Unemployed
workers had even
less money to
make purchases
nearly 3 million
people lost their
jobs.
40. 12 million people
went out of work,
12,000 people was
made unemployed
everyday,
20,000 companies
and 1616 banks
had gone bankrupt,
and
23,000 people
committed suicide
in one year – the
highest ever.
The total loss by
the end of the next
week amounted to
$30 million dollars,
ten times more than
the annual budget
of the federal
government, far
more than the U.S.
had spent in all of
World War 1.
Contributing to The
Great Depression.
42. Migrants
• By the end of the 1930s, 2.5 million people had left the Great Plains
states.
• Many headed along Route 66 to California, then settled in camps and
sought work on farms.
• The migrants were called Okies, after the state of Oklahoma, but
migrants came from many states.
45. Questions of Credibility
Hoover eventually saw the limitations
of his ideals and pushed for some
direct relief, but his optimistic claims
about the economy undermined his
credibility with voters.
Early on, when millions lost their jobs,
he said the nation’s basic economic
foundation was sound.
Just a few months after the crash he
announced “I am convinced we have
passed the worst,” and he spoke
glowingly about the relief efforts.
Millions of Americans did not share
Hoover’s viewpoint.
Questions of Compassion
Many Americans came to question
Hoover’s compassion.
As economic conditions grew worse,
his unwillingness to consider giving
direct relief to the people became
hard for most Americans to
understand.
When Hoover finally broke his stated
beliefs and pushed for programs like
the Reconstruction Finance
Corporation, people wondered why
he was willing to give billions of
dollars to banks and businesses but
not to individuals.
46. •Some who lost their homes lived in
shantytowns, or Hoovervilles,
47. The Hoover Dam.
•The dam harnessed
the Colorado River to
provide electricity
and a safe, reliable
water supply to parts
of seven states.
•The federal
government
provided the funding
for the project
($800m)
Wall Street Wall Street is located in lower Manhattan, New York. It is literally a name for a street that features many large financial office buildings and companies where stocks and shares can be traded to make profit. Some major stock exchanges in Wall Street are: - The New York Stock Exchange, - The National Association of Securities Dealers Automated Quotations - The American Exchange - The New York Mercantile Exchange - And The New York Board of Trade
Why buy stocks and shares? The answer is, people buy stocks and shares for money, they invest money in their stocks and shares to earn lots of money, back then they thought money would multiply, even now people put their entire savings onto stocks and shares and live off it. People buy stocks when their prices are sold at low and sell them at high, this is how they make money. People who are good at stocks and shares can turn 1 thousand dollars into 1 thousand five hundred in no time, but others who are inexperienced could well loose their entire savings just by doing stocks and shares.
Quotes “ If a man saves $15 a week, and invests in good common stocks, and allows the dividends and rights to accumulate, at the end of twenty years he will have at least $80,000 and an income from investments of around $400 a month. He will be rich. And because income can do that, I am firm in my belief that anyone not only can be rich, but ought to be rich.” From John J. Raskob, Everybody Ought to be Rich (June 1929) in the days before the crash.
Quotes (continued) Another major investor, Will Payne, stated that the Wall Street Stock Exchange had becomes such an easy way to make money that it ceased to be a gamble, because in a gamble, someone loses – but when invested in stocks and shares, “everybody wins”. Many people thought that the market could sustain the growing high prices. Irving Fisher, a highly-regarded American economist, said before the crash, “Stock prices have reached what looks like a permanently high plateau.”
The Stocks and Shares in the 1920’s During a period of time, stocks and shares rose at the phenomenal rate. Wages were increased, stocks were expensive and people went and invested most of their money and started borrowing off each other to make a fortune. Unfortunately in 1929, The Great Wall Street Crashed, a bomb was released in America’s largest bank and money was lost. People went bankrupt and America fell into debt. Not only America, but many countries, such as Weimar in Germany, were affected by this crash because they had built her economy on America’s loans.
Losses The loss from the crash was unbelievable: 12 million people went out of work, 12,000 people was made unemployed everyday, 20,000 companies and 1616 banks had gone bankrupt, and 23,000 people committed suicide in one year – the highest ever. The total loss by the end of the next week amounted to $30 million dollars, ten times more than the annual budget of the federal government, far more than the U.S. had spent in all of World War 1. The Great Wall Street Crash was probably also one of the major contributing factors to the event that followed – The Great Depression.
