3 Questions
What was the practice known as when people bought stocks with a small down payment and borrowed the rest?
Buying on margin
What was one of the popular cultural elements in the 1920s?
Flappers
What was one of the indications of economic instability that emerged in 1929?
Slipping domestic and foreign markets for goods
Study Notes
- The 1920s marked a decade of economic prosperity and excitement in the United States.
- The economy was booming, leading to a period of partying and decadence, known as the Roaring Twenties.
- Popular culture of the decade included flappers, bobbed haircuts, jazz and blues music, and speakeasies.
- Alcohol was prohibited but easily obtained through bootleggers and speakeasies.
- A new craze emerged during the 1920s - playing the stock market. Easy credit allowed people to buy stocks with a small down payment and borrow the rest, a practice known as buying on margin.
- The stock market saw dramatic increases in value due to the demand for stocks and easy credit, leading to overvaluation.
- Indications of economic instability emerged in 1929, with domestic and foreign markets for goods starting to slip.
- Europe had recovered from the war and was less dependent on North American goods, leading to tariffs on imports and stockpiling of goods in American factories.
- Despite warnings from experts, many ignored the signs of an unbalanced marketplace and the impending correction.
Explore the economic prosperity, cultural trends, and stock market craze of the 1920s. Learn about the roaring economy, popular culture, prohibition, and the unstable stock market leading up to the Great Depression.
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