The Great Depression

1. How does a person make money on an investment?

Buy the stocks low, and sell the stocks higher than what you bought it for.

2. What does 'cheap credit' mean?
There is a lot of money available to borrow, regular people with so so credit can get a cheap loan and buy something they could not otherwise afford.

3. What is 'buying on margin' mean?
You can put ten percent of the cost down, and pay interest on the other ninety percent, while waiting for your stock to enlarge.

4. How is 'speculation' different from 'investment'?
Investing is buying something for a long term investment with little or no intent to sell; a speculator is someone who rides the market and buys something only to sell it for more money later.

5. How does 'panic selling' start?
When everyone around you is selling thier stocks, and you realize that you need to sell as well or lose all your money.

6. How can high unemployment start a negative economic cycle?
As people lose thier jobs, productivity goes down, less and less people have money to spend, and even if they did there would be less produce to buy.

7. How did increases in technology contribute to overproduction in the 1920's?
Electricity and mechanical devices made it easier to make more of your product with less employees. This means less people have an income, and less money to buy the increased amount of products.

8. What is meant by 'uneven distribution of wealth? Is it a bad thing?
One tenth percent at the top of economy owned as much as the bottom fortytwo percent of American families. Almost half of all Americans were living in poverty.

9. What is a tariff, and why don't they seem to work in the modern economy (post-WWI)?
An extra tax we have to pay on an imported good. When everyome decides to post a high tariff, it hurts everyone in the end.

10. What is 'rugged individualism? Is it real?
You must be self dependant and look to themsevles for a fix.

11. What is a Hooverville, and why is it called that?
A town or grouping of tents or boxes in which people would camp out.