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(A flawed US economy, Stock Market Crash) - Coggle Diagram
A flawed US economy
Several weaknesses in the US economy caused serious problems
Included uneven distribution of wealth, overproduction by business and agriculture, and many Americans were just buying less
By 1929, American factories were making half the worlds industrial goods, lots of profits, but they were not evenly distrubited
The richest 5% of the population got 33% of the income
60% of all American families made less than $2,000 a year
with people not being able to buy things with the lack of money, stores started to order less things from factories because they were not selling
then the factories reduced workers because of the lack of money coming in
a downword spiral started to form
1 more item...
Why might Americans have been buying less in the years preceding the stock market crash
what major weakness had appeared in the American economy by 1929
Stock Market Crash
Some investors thought that stock prices were unnaturally high
People then started to sell stocks thinking prices would go down
gruadally the prices had become lower. causing a panic
everyone then watned to sell there stock and no one wanted to buy
New Yorks stock exchange about the bombing to the U.S. economy showed the rise for stock prices
This caused many middle- income people to buy stocks on margin.
This only worked if the stock prices were rising. if this fell, then the investors had no money to pay off the loan
A record of 16 million shares of stocks were sold.
the Market then collapsed