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The Roaring Twenties Come Crashing Down (1919 - 1929)
Transcript of The Roaring Twenties Come Crashing Down (1919 - 1929)
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in economic activity
October 29, 1929
, stock prices on Wall Street
These fluctuations occur around a long-term growth trend, and between periods of rapid
(an expansion), and periods of
or decline (recession).
The era of the
marks a period of optimism and prosperity. However, there were significant changes in the economy, especially the events regarding the recession and Black Tuesday. With the fall of the stock market, a chain of events lead to deep economic stagnation around the world.
This was the start of
The Roaring Twenties Come Crashing Down
Economic Stagnation and
1919 - 1929
Today, we will be discussing about:
Factors and Conditions
The Stock Market Crash in 1929
The Business Cycle
Rosenberg, J. (2012). The Stock Market Crash of 1929: About.com 20th Century History. Retrieved on January 18, 2014, from http://history1900s.about.com/od/1920s/a/stockcrash1929.htm
The Great Depression.
roduct, income, business profits
bankruptcy and unemployment rates
(GDP down by 10%) or
(three or four years) recessions are considered as an
economic growth is referred to as
world economy was plunged into the
The number of
many lived in conditions close to
prior to the Stock Market Crash
consumers were building up
due to easy credit
worth of market assets
including business closures, loss of savings
to families who were
(similar to credit cards today).
As the nation’s economy grew worse, everyone stopped making purchases, therefore leading to an economic stagnation. Consumers were unable to pay for the items they had purchased on
"Buy now, pay later"
By 1929, over
people had invested in credit
That's all folks, we hope you
enjoyed our presentation!
Now, it's time for a...
Inflation is when the level of prices of goods and services increase in an economy over a period of time. Money becomes more valuable and the government is forced to print more money because all the money is being spent in the market.
This is when things get intense. Recession is the drop of the market. If the market drops that means that there will be an increase in unemployment. If a recession goes on for a long period of time it can be classified as a depression.
Depression is similar to recession but it is more severe. Depression is basically a long recession. The Great Depression took place in the 1930s after WW2. It is known as the deepest depression in the 20th century.
Recovery is the last stage in the business cycle. Recovery is a period of time in which there is an increase in business activity which signals the end of a depression. Unlike recession, recovery is hard to recognize until several months later. Economists use things like the GDP, inflation and unemployment graphs to notice the recovery.
The Business Cycle
Everything is going fine. The economy is doing well. Most people have a sufficient income for essentials and some have a bit extra income left. This means that companies are hiring and jobs are easy to get.
This is when the GDP (Gross Domestic Product) is increasing a bit. GDP is a method that is used to determine the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period. At this stage things are improving slowly.
• 4 stages:
Inflation, Recession, Trough, and Recovery
Lack of Financial Regulations
The Vulnerable Canadian Economy
Shrinking Demand for Canadian Exports
Trade Protectionism and Tariffs
The government did not have
financial services companies
in the US.
Canadian economy was very
American parent companies responded by
closing Canadian branches
With the severe
economic slowdown supply and demand decreased
Canadian economy was geared to the export of minerals, lumber, newsprint, fish, and
33% of Canada's national income came from exports.
3 years after Black Tuesday, international trade dropped by 50%
massive unemployment throughout Canada and the world
Many countries dealt with the economic crisis by
This had a huge impact on Canada because we're a
major exporting country
stock market crashed investors
had to repay theirs loans but they had
. So many
brokerages were bankrupt
purchased stock shares
. When the
, depositors worried that they might not be able to
withdraw their money
to take out their savings.
The rush itself
emptied bank cash reserves
, bankrupting hundreds of American banks.
Canadian investors lost money on US and Canadian stock markets
Canadian was know for their wheat products.
Other countries increased their wheat production.
World wheat productions had been at an all-time high in the 1920s, there was a stockpile of 7 million bushels of unsold wheat.
Nations such as United States and Brazil were burning excess wheat to create an artificial demand.
Canada was producing too much wheat in world markets.
Wheat prices collapsed, sinking from $1.03 per bushel in 1928 to $0.29 by 1931.
What happens when the world's financial engine stalls and falters?
By 1929, American factories were turning out nearly half of the world’s industrial goods. The rising productivity led to enormous profits. However, this new wealth was not evenly distributed. The richest 5% of the population received 33% of all personal income in 1929.
Yet 60% of all American families earned less than $2,000 a year. Thus, most families were too poor to buy the goods being produced. Unable to sell all their goods, store owners eventually cut back their orders from factories.
Factories in turn reduced production and laid off workers. A downward economic spiral began. As more workers lost their jobs, families bought even fewer goods.
In turn, factories made further cuts in production and laid off more workers. And so the spiral downward begins . . .
How Did This Come About?
Let's See if You Can Beat the Market