Kelly Hajdasz

John F. Kennedy Middle School

khajdasz@uticaschools.org

Why Buy Stock?

Pepsi stock is $10/share. You have $100. How many shares of Pepsi stock can you buy?Ans.__________________________

Pepsi stock goes up to $15/share. You sell your stock. What is your profit?Ans.__________________________

Buying Stock on Margin (pay 10%,borrow 90%)

Pepsi stock is $10/share. You have $100. With $100 you could borrow $900 to buy stock on margin. How many shares of Pepsi stock can you buy on margin?Ans.___________________________

Pepsi stock goes up to $15/share. You sell your stock. What is your profit?Ans.____________________________

Can you lose money in the stock market?

I would rather use my own money to invest and make a profit. Agree or disagree. Why?

I would rather use someone else’s money to invest and make a profit. Agree or disagree. Why?

Causes of the Great Depression(1929-1941)

Buying on Margin/Stock Market Crash Rash of selling caused stock prices to fall Brokers asked investors to pay the money still owed on

stocks bought on margin Investors who could not pay had to sell their stocks Prices dropped even more Black Tuesday: October 29, 1929 – prices fell sharply as no

one was buying stock (stocks were now worthless)

Problems in the Banking System During the 1920’s, banks made loans to Americans who

invested in the stock market When the stock market crashed, borrowers could not repay

their loans Without money from the loans, the banks could not give

depositors their money when they asked for it Many banks were forced to close Depositors lost their money they had in the bank

Bank Run Media — History.com

Overproduction/Underconsumption Overproduction – farms and factories produced huge

amounts of goods in the 1920’s Wages did not keep up with the cost of goods Underconsumption – Americans were not buying as many

products Factories closed or laid off workers

Too many goods, too few buyers

Why do people own businesses?To make money.

What three ways can businesses make money? Sell productProblem – Americans had less money to spend Sell stockProblem – Americans weren’t buying stock Borrow from the banksProblem – Banks were in trouble

With this situation, what options do you have to keep

from going out of business? Lower wages Lay off workers

The Downward Spiral/Domino Effect Stock market crashed which ruined many investors Without money from investors, businesses could no longer

grow and expand With banks in trouble, business could not get capital Businesses cut back on production Production cutbacks led to wage cuts and employee layoffs Unemployed workers had little or no money to spend

therefore bought less Demand for goods fell Businesses laid off more workers or went bankrupt

Steps of the AHPPA

Step 1 – Define the Problem Step 2 – Gather Evidence

Step 3 – Determine the Causes Step 4 – Evaluate the Policy

In your own words, describe the causes of the Great

Depression.

A Bank Run. Photograph. garybrandastrology.com. 22 March 2011. <http://garybrandastrology.com/images/Bank_run.gif&imgrefurl>

Arkansas_children. Photograph. docstoc.com. 14 March 2011 <http://www.docstoc.com/docs/3546983/Causes-of-The-Great-Depression>

Bank Run. Videoclip. history.com. 14 March 2011 <Bank Run Media — History.com>

Causes of the Great Depression. Worksheet. maxwell.syr.edu. 22 March 2011 < http://www2.maxwell.syr.edu/plegal/ppa/worksheet3us.html>

Depression Causes. Chart. mrberlin.com. 16 March 2011 <http://mrberlin.com/images/products/detail/Depression_causes_thumb.1.png&imgerfurl>

Doris Car Showroom. Photograph. landmarks-stl.org. 22 March 2011

<http://www.landmarks-stl.org/images/uploads/architects/Wees/doriscarslarge.jpg&imgrefurl>

Stock Market Crash. Newspaper. mitchellarchives.com. 16 March 2011 <http://mitchellarchives.com/the-great-stock-market-crash-of-1929.htm&usg>