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The Great Crash

Causes of the Great Depression. The Great Crash. Downward economic spiral. Decline in consumer spending Overproduction of goods (no one is buying them) Manufacturers lose money and have to cut back Lay off employees Americans lose money Cycle continues. Uneven Prosperity.

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The Great Crash

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  1. Causes of the Great Depression The Great Crash

  2. Downward economic spiral • Decline in consumer spending • Overproduction of goods (no one is buying them) • Manufacturers lose money and have to cut back • Lay off employees • Americans lose money • Cycle continues

  3. Uneven Prosperity • Rich get richer and the poor stay poor. • 70-80% of families have no savings and make minimum wage. • Consumer debt is so high that people can’t afford to repay their loans • Everyone has to work to get by

  4. Stock Market • Get rich quick mentality • Speculation – people are investing their life savings hoping for big returns • Buying on margin – purchasing stock for a fraction of the price and borrowing the rest • Stock market boom based on borrowed (not real) money

  5. The Great Crash of 1929 • May 1928-September 1929, prices doubled in value • beginning in Sept 1929, gradual slide • Black Thursday(Oct.24) • largest sell-off in NYSE history • Black Tuesday(Oct.29) • $40 billion in stock value lost by Dec.

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