Stock Market Mr. Biddle Survey of Social Studies
Stock Market • Stock Market – a place where people can buy, sell, or trade stocks • Stock – Certificate of ownership in a corporation, or business • Stockbroker – person who buys or sells stocks for investors • Stockholder – a person who owns a share of the stock in a corporation (also known as a shareholder)
Why Use the Stock Market? • Companies sell shares of their companies to raise money to start a business or try to expand their business • Less risk of failure • People buy stocks to try and get in on the businesses profit.
Reasons for the Great Depression 1. Stock Market Crash • Bull Market - When stock sells are on the rise • Speculation/Margin - buying stocks on credit • Margin Calls – Stockbrokers call in the credit and debt that is owed to the stock market • Black Tuesday – October 29, 1929 the stock market system failed, because no one was able to buy and sell stocks
Reasons for the Great Depression 2. Mass Production • Country produces more “goods” than there is money to buy them in the country • Companies began to stock pile merchandise • This led to Mass Layoffs
Reasons for the Great Depression 3. Banking Crisis • People made bank runs to pay off their Stock debt (Margin) • The banks were forced to close, because they did not have enough money to give to everyone
Reasons for the Great Depression 4. No World Wide Trade • Hawley-Smoot Tariff – Raised the $ on imported goods and countries did not want to trade with US and rose $ on them • No $ coming in or out of the US (No foreign economic relief)
Reasons for the Great Depression 5. Federal Reserve Failed • It didn’t monitor interest rates like they should’ve or kept the economy from failing.