Stock Market

Mr. BiddleSurvey 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.