Category 1
What is an installment plan?
Paying for a large purchase over time.
What does buying on margin mean?
Paying part of a stock’s price and borrowing the rest.
What did some businesses lie about to keep investors happy?
Their earnings.
What did stockbrokers demand when stock prices fell below their original prices?
Money from people who bought on margin.
How much money disappeared from the American economy on Black Tuesday?
$30 billion.
What are two examples of things people bought using installment plans?
cars and houses
What percentage did people have to pay when buying stocks on margin?
10%.
Why did many consumers eventually stop buying goods?
They had increasing debt.
What did investors do to get money to pay their stockbrokers?
They sold their stocks.
Why couldn't banks give everyone their money after the crash?
Stockbrokers had not repaid their loans.
What happened to stock market activity during the 1920s?
it increased
If a stock purchase cost $2,000, how much would someone pay upfront when buying on margin?
$200.
What happened when businesses could not sell all of their products?
Warehouses filled with unsold products.
What happened on October 24, 1929?
13 million stocks were sold and prices plummeted.
About how many banks went bankrupt immediately after the Great Crash?
Almost 700.
What is speculation?
Taking risks to make a quick profit.
By 1929, stockbroker loans to people buying on margin exceeded how much?
$7 Billion
What did many professionals begin doing by September 1929?
Selling their stocks.
What was October 29, 1929 called?
Black Tuesday.
By 1933, about how many banks were out of business?
Nearly 6,000.
Why did people speculate in the stock market?
They hoped to make money quickly.
Why was buying on margin easy during the 1920s?
It was easy to get a bank loan.
What happens to stock prices when there are more sellers than buyers?
Prices fall.
How many stocks were sold on Black Tuesday?
16 million.
Name one cause of the Stock Market Crash listed in the lesson.
Overuse of credit, banks loaning money to speculators, or businesses lying to investors.