Stock Terms
Define "Portfolio"
A collection of investments owned by an investor.
Define "Bank Run"
When many consumers withdraw money at the same time
Relief, Recovery, Reform
What are the seven causes of the Great Depression?
1. Overproduction
2. Agriculture
3. Banks and Businesses Fail
4. Job losses and falling wages
5. Uneven distribution of wealth
6. Stock market crash
7. Consumer debt
Define "Bull Market"
a market condition that means stock prices are expected to rise
Define "Consumer Confidence"
The measurement of the consumers opinion on the current economy in which determines the overall stability of the economy.
When did the New Deals start and end? (First New Deal and Second New Deal)
First New Deal 1933-1934, Second New Deal 1935-1938. (1933-1938)
How does overproduction contribute to the Great Depression?
- Leads to surplus
- Deflation, value of goods decrease
- overspending on production
When the stock value falls, you profit from it.
Define "Rally"
a rapid increase in the general price level of the market or of the price of an individual stock.
A banking system in which the amount of reserves that banks hold is less than the value of their consumers deposits.
What did the second phase of the New Deal prioritize?
Increasing worker protection, building long lasting financial security, and the beginning of the Works Progress Administration (WPA).
What is the difference between a bank run and a bank panic?
What is a pro and a con of Short-Term Investments?
Pro:
- can profit very quickly (rally's, high volatility)
Con:
- Very risky
Define "Forex"
Foreign exchange involving trading different currencies
Define "Gross Domestic Product (GDP)"
The total value of goods and services in a region in a year.
How effective was the New Deal towards ending the Great Depression?
People were fond of the New Deals policies, though was not a main contributor to ending the Great Depression.
How does unemployment rate affect the economy?
Unemployment rates affects the economy because people are buying less and less goods which means prices rise (inflation).
Why would people do Long-Term Investments?
They believe that the company/industry will do well in the future based off news and recent information
Define "IPO"
An initial price offering which happens when a private company becomes a publicly-traded company, in order to raise money.
Define "Fiscal Policy"
The governments spending decisions that influence the economy.
How was the New Deals' approach to the Great depression different than previous attempts?
- Highlighted consumer demand and federal deficit spending
- Government intervention
- Various programs and agencies to address economic challenges
What was the Smoot-Hawley Tariff and how was it impactful towards the Great Depression?
- Greatly increased the cost of imported goods
- People such as farmers were impacted as they had less competition
- led to international trade collapsing because America's major trading partners took action against it
How does diversification contribute to risk in a stock portfolio?
A well diverse portfolio helps reduce the impact of poor performance in any single investments.