LESSON 81 The Crash of the Economy p 232236 LESSON 1 The Crash of the Economy 223 VOCABULARY Herbert Hoover 232 Stock Market Bull Market 233 Speculation Buying on margin ID: 782542
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Slide1
Unit #8The Great Depression of 1930s
LESSON #8:1The Crash of the Economy
p. 232-236
Slide2LESSON
#1 – The Crash of the Economy
(2/23)
VOCABULARY
Herbert Hoover (232)Stock MarketBull Market (233)SpeculationBuying on marginMargin callThe Great CrashBlack Tuesday (234)A bank run
ESSENTIAL QUESTIONS
Why were so many people freely irresponsible with Stock Market investments?
Why did Stock Market prices keep rising, then drop sharply?
Slide3LESSON
#1 – The Crash of the Economy
(2/24)
ESSENTIAL QUESTIONS
Why is a Bull Market good for investors?Why can a long Bull Market become a problem?VOCABULARY
Herbert Hoover (232)
Stock Market
Bull Market (233)
Speculation
Buying on margin
Margin call
The Great Crash
Black Tuesday (234)
A bank run
Slide4Wednesday, 2/3/16
American History – subject for today
Lesson #1 – Economy crashes (continued)
Essential Questions:
Why is a Bull Market good for investors?
Why can a long Bull Market become a problem?
Homework
No quiz this week
Slide5What does this graph tell you?
Slide6What does this graph tell you?
Slide7What does this picture tell you?
Slide8What does this picture tell you?
Slide9What does this picture tell you?
Slide10What does this picture tell you?
Slide11What does this picture tell you?
Slide12What does this picture tell you?
Slide13The Crash of the Economy
Intro thoughts
Mr. Jacoby will read six statements. On a scale of 1-10, give each a score.
Slide14Ponder questions
People should be free to invest their money however they want.The government should force banks to guarantee much of the money the say they have. In other words, if you deposit $1,000 in a bank, they should guarantee that the $1,000 will be there when you want it.
The government should not regulate the investment industry. It should be free to lend freely, and invest freely.
Banks should hold most of their money in reserve. In other words, they should not be allowed to lend out money they don’t have.
Banks are smart if they take the money that is owed to them, and invest it in other markets to make a profit. Everybody gets richer that way. When the stock market, real estate market, or any investment market starts gaining value too fast, the government should intervene to slow that growth down
Slide15Ponder questions response
For your #2, 4, and 6, reverse your numbers. If you had a 7, now subtract that from 10, to get a 3.The higher your number is, the more risk you think Americans should be allowedIt was this risk that led to the stock market crash, as well as the more recent .com crash and real estate crashWhy would Americans like the ability to take risk?
Slide16Intro thoughts
Then watch this…
http://
americanhistory.about.com/video/5-Causes-of-Great-Depression.htm
And answer questions again…
Slide17THE CRASH OF THE ECONOMY
https://www.youtube.com/watch?v=bgY48AHdVJ0
Watch this 10m intro vid.
Slide18The long “Bull Market”
(reference p. 232-233)What was the 1920s like, that kept people gambling their money in the stock exchange?What is a Bull Market?What was buying on margin?
Why did people just start selling their stocks in 1929?
What happens at the “margin call?
https://www.youtube.com/watch?v=fV4l5w0ZpcY
Slide19The Crash of the Market
Reference p. 233What does it mean that prices “peaked”?On Monday, Oct. 21, 1921 prices started fallingOnce prices started falling, speculators knew they earned as much as they could on “inflated” stocksWhat does “inflated” value mean?
What happened on “Black Tuesday”?
How much was lost?
https://www.youtube.com/watch?v=FXNziew6C9A
Slide20The Collapse of the Economy
The stock market crash only effected investors, not most AmericansThe way the banks were effected THEN hurt the average AmericanWhat had banks done during the “long bull market” of the 1920s?When the banks were unable to collect on some of their investors, they stopped lending $$ to businesses.
What were businesses then unable to do?
If a bank could not survive the losses and had to close, what happened to your savings in that bank?
What is a “bank run”?When depositors run to the bank to pull out their money before it collapses, often causing the bank collapse This started the collapse of the whole economyhttps://www.youtube.com/watch?v=bgY48AHdVJ0
Slide21Your analysis:
Could anything have been done to prevent the crash of the stock market in October 1929?Could the depression have been prevented if the stock market never crashed?