AD+-+Great+Depression

** 1. Excessive use of credit **
// -People kept using credit to pay for things instead of using cash, so if they didn't actually have the money to pay for the things they were trying to buy, then they would be immersed in debt. //

** 2. Millions of dollars spent on stocks **
// -Spending money on stocks was very risky and if the market crashed and you had invested too much into the failing stocks, then you would lose a lot of money, or be in debt. //

** 3. Margin buying **
// -Buying stocks with money you didn't actually have was risky, especially if the market crashed, because you would be faced with a whole lot of debt that you couldn't pay off. // // -Brokers required investors to put in very little of their own money. // // -During the 1920's leverage rates up to 90 percent debt were not uncommon. // // -Where as today the federal reserve's margin requirement (under regulations T) limits debt to 50 percent. // // -When the stock market started to contract, many individuals received margin calls. They had to deliver more money to their brokers or else their shares would be sold. Since many individuals did not have the equity to cover their margin positions, they shares were sold, causing further market declines and further margin calls. //

//** 4. Rising Interest Rates **//
// -Rising interest rates scared investors. They were afraid that they couldn't afford to pay the rising interest rates, so people frantically started selling their shares. //

** 5. Banking Crisis **
// -The closing of banks made many people lose all of their money at once. // // -Many people went to the bank to retrieve their money, but since everyone went at the same time, banks eventually ran out of money and therefore had to close until they produced more, which could take a while. // // -This was called "Run-on" banks, which is when tons of people all get their money at the same time, causing the bank quickly collapse. //

** 6. Business Failures **
// -Many businesses went bankrupt, causing many people to lose their jobs. // // -Many workers went on strike because they were being paid less than from before. // // -They went on what was called a sit down strike, which was when they went to work, sat down and refused to work, they went to work so they didn't just get replaced. //

//-Only the wealthy which was a small population, could afford to buy goods//
 * //7. Uneven Distribution of Wealth//**
 * //-//**//Businesses were failing because no one could buy goods//

//-Caused the spread of the depression// //-Stopped any imports//
 * //8. The Rise of Tariffs//**