Stock Market Causes

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A stock is a type of ownership in a company where a person is a part of the company’s assets and earnings. Common and preferred are the two types of stock. Common stock is where the owner is entitled to vote at meetings and obtain dividends, while preferred stock does not have the right to vote, but has a higher claim on earnings than common stock. Meanwhile, a stock market is a market where shares of corporations are issued and traded through exchanges. Some examples of stock markets in the United States and around the world are the AMEX, or American Stock Exchange, the NYSE, or New York Stock Exchange, Tokyo Stock Exchange, and London Stock Exchange. In addition, the reason why companies issue stock is because they need the money. For them …show more content…
It was considered the most severe economic crash in U.S. history. There were five causing factors of the Great Depression. The first factor is the stock market crash of 1929. Forty billion dollars were lost by stockholders, and the country began the Great Depression. The second factor is bank failure. During the Great Depression, thousands and thousands of banks had failed. Many deposits were uninsured, so many people ended up losing a lot of their money. Other banks that survived were less willing to create new loans. which led to less consumption. The third factor is reduction in purchasing. With the economy down, many people stopped consuming goods and services. Due to the lack of consumption in the market, it affected the number of items being produced and the workforce. Many individuals were unable to pay off their things because most of them had lost their job. Because of the job reduction, the unemployment rate rose to twenty-five percent, which did not help the economy. The fourth factor of the Great Depression is the American economic policy with Europe. The government established the Smoot-Hawley tariff, which imposed a high tax on foreign products. Unfortunately, due to the tariff, foreign countries began trading less and less with the United States. Finally, the last factor of the Great Depression is drought conditions. There was an area in Mississippi Valley that was nicknamed “The Dust Bowl.” In this area, a major drought occurred, which killed off crops and smothered livestock. The drought affected the agricultural production, which made the Great Depression even worse. The people that lived in this area had to sell off their farm because they could not pay off their taxes and debt. The effect that the Great Depression had on macroeconomics was that people began to consider that the government can help the country out of this economic depression. They wanted to increase government spending if the

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