The New DealRecession, depression, and economic boom are cyclic events in a country's fiscal status: theGreat Depression of 1929 was no exception. This Depression was a disastous event that was caused bya number of factors. The primary precipitating event was the Stock Market crash in 1929. The years ofWW 1 had created a boom economy and investors were positive that this would continue, so theybegan making questionable investments, hoping to make huge profits from the war time economy. Theinvestors bought stocks, no matter what the cost, assuring themselves that they could re-sell at evenhigher prices. But many people were unable to afford the inflated prices, so investors used a marginsystem. Buying on margin is an procedure whereby the purchaser buys stock for a fraction of the costand borrows the rest. This arrangement led to the organization of Investment Trusts; these companiesbought stock completely on credit; people then also began buying stocks of these Investment Trusts oncredit; this really distorted the economic basis of the stock exchange because massive numbers ofloans were taken out to cover investments that were not necessarily stable. Near the end of the decade,investors finally realized that too much money had been financed without suitable collateral. Wheninvestors realized the riskiness of this venture, many of them decided the best way out of thispredicament was not to hold onto the shares and they began selling them immediately after ...
To Order an Original Plagiarism Free Paper on the Same Topic Click Here
Other samples, services and questions:
When you use PaperHelp, you save one valuable — TIME
You can spend it for more important things than paper writing.