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Questions and Answers
What practice allowed people to buy stocks with a small down payment and borrow the rest?
What practice allowed people to buy stocks with a small down payment and borrow the rest?
- Investing in real estate
- Buying on margin (correct)
- Investing in mutual funds
- Short selling stocks
What was the popular culture of the Roaring Twenties known for?
What was the popular culture of the Roaring Twenties known for?
- Country music and line dancing
- Hip-hop music and breakdancing
- Classical music and ballroom dancing
- Flappers, bobbed haircuts, and jazz music (correct)
What caused overvaluation in the stock market during the 1920s?
What caused overvaluation in the stock market during the 1920s?
- Limited access to stock markets
- Decreased demand for stocks
- Demand for stocks and easy credit (correct)
- Tight regulations on stock trading
What factor contributed to economic instability in 1929?
What factor contributed to economic instability in 1929?
Flashcards
Buying on margin
Buying on margin
Purchasing stocks with a small initial payment and borrowing the rest of the money.
Roaring Twenties popular culture
Roaring Twenties popular culture
A period known for new social trends, including flappers, bobbed haircuts, and the popularity of vibrant jazz music.
Overvaluation in the stock market during the 1920s
Overvaluation in the stock market during the 1920s
An inflated perception of stock values fueled by high demand and readily available credit.
Economic instability factor in 1929
Economic instability factor in 1929
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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.
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