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Many people thought that it would be a smart move to invest almost all of their money in the leading stocks. They were oblivious to the fact that during 1929, the prices of stocks were decreasing, and they were losing money. All the signs were there, but they decided to ignore those signs and continue investing. When the Stock Market crashed on October 29, almost everyone in the country lost large amounts of money. The wealthiest people soon became the poorest. The country was in chaos, and the banks panicked. So say you had saved your life savings in the local bank; you could almost be sure that after the crash, almost all of it would be gone. Had the banks not been allowed to gamble with your money, the Great Depression would have had much less of an impact on the citizens of the U.S. Thankfully, we learned our lesson, and afterward, the banks no longer had the right to spend your money.
Another way that the Great Depression could have been prevented was by having tighter rules on margin. Margin is borrowing money to buy securities. Let me throw out some numbers based on the current margin rules. You have a million dollars in your margin account. You can spend up to two million dollars on stock (the "initial margin" is 50 percent), and you must maintain an equity level of at least 25 percent. (Equity is the value of the stock minus what you owe the brokerage.) If your equity drops below the maintenance margin, you've got to put more money in your account. This is a "margin call."
In the 1920s, the initial margin was only 10 percent, and there wasn't a rule on maintenance margin; the brokerage house could set it to whatever they wanted. When the prices of stocks started to go into the toilet and brokerages had to dump investors' portfolios to cover the margin, the prices of those stocks fell further. (When people start selling stocks heavily, the price will go down to encourage people to buy the stock.)
What else can I help you with?
Which was a result of the Great Depression worldwide?
global unemployment
How did the Great Depression impact the global community?
It help very much.
Did the Great Depression happen in Arizona?
Yes it did. No State was spared. The Great Depression was a global event.
What was not a response to the global Great Depression?
increased international trade Japanese isolationism
Response to global great depression?
demilitarization
What could have done to lessen the effects of the global great depression?
The nations could have worked together toward a collective solution.
Which was a result of the Great Depression worldwide?
global unemployment
What were the effects of the great depression for the US?
Saisbres.
What were four effects of the Great Depression of the 1920s?
[em
How did the Great Depression impact the global community?
It help very much.
What is global recession?
Global recession is a period of economic slowdown. The Great Depression and Great Recession are two periods in time that experienced global recession.
Did the Great Depression happen in Arizona?
Yes it did. No State was spared. The Great Depression was a global event.
During the global depression war debts caused great suffering in?
Germany
What was not a response to the global Great Depression?
increased international trade Japanese isolationism
Response to global great depression?
demilitarization
What trade policy worsened the global economy prior to the Great Depression?
Tariffs :)
What event was a greater impact the great depression or the great recession?
The Great Depression had a more profound and lasting impact than the Great Recession. It resulted in widespread unemployment, significant economic contraction, and transformative changes in government policy and regulation, shaping the global economy for decades. While the Great Recession also caused severe economic distress and led to important reforms, its effects were less severe and shorter-lived compared to the Great Depression. Ultimately, the Great Depression reshaped societal structures and economic systems in a way that the Great Recession did not.
