Understanding the Stock Market 11.6.1 Describe the monetary issues of the late nineteenth and early twentieth centuries that gave rise to the establishment.

Understanding the Stock Market

11.6.1 Describe the monetary issues of the late nineteenth and

early twentieth centuries that gave rise to the establishment of

the Federal Reserve and the weaknesses in key sectors of the

economy in the late 1920s.

Important Terms

• Stock Market/Stocks—384

• Buying on a Margin—384

• Interest—385

• Speculator—385 and US Glossary

• The Federal Reserve—237

• Tariff—US Glossary and 388

• Bull Market/Bear Market—384-385

New York Stock Exchange

Inside the NY Stock Exchange

History of the New York Stock Exchange

• 1792—formed by 24 stock brokers who took an oath on Wall street

• 1867—first stock ticker• 1914—shuts down for 4 months due to World

War I• 1929—Black Tuesday, October 29th

Reading a stock market table

1. Starbucks Corp. 2. (SBUX) 3. Volume: 16,990,1024. Last Trade: 8.455. Change: +0.62

(+7.92%)6. Day's Range: 8.01-

8.50Now you get to pick your

own stocks!

The Federal Reserve System

• Created in 1913• 12 regions—each

with Federal Reserve Bank

• Provide safety net for banks

• Regulates money in circulation

• Sets interest rates

Hidden Economic Problems in the 1920s

• Americans buy goods on credit– Debt (1921-1929: personal debt doubles from 3.1 billion

to 6.9 billion)

• Americans buy stock!– Buying on Margin

• Overproduction• Underconsumption

Dow Jones Industrial Average Today

Comparing the Great Depression to Today

Opening Bell