**Stock Market Crash
1. bonds lost, financial advisors took 40cents of each dollar
2. citizens gradually begin buying corporate bonds because the government told them to. Also, the big businesses helped US out during WW1 so that trust was there.
3. Instead of only a few people losing faith in the market and cashing outlier bonds, asses of people did at the same time, so those financial advisers had no time to pay the money back that they stole.
4. easy credit, more disposable income led to people relying on credit with luxurious items and after the crash, no one was able to pay banks back
5. "Buy on Margin" began corruption in the entire country and it led to people trusting financial advisors with their bonds since they helped them invest
**American Economic Policy with Europe
1. Before WW1, foreigners invested more money in the US than Americans invested in the US and foreign nations.
2. The US lent money to the Allied countries who suffered losses in the war and they could not pay the US back.
(10 million dollars in France, Britain, and the other Allied nations).
3. The U.S. refused to cancel the debts that European Nations owed them , however they did not understand the serious effect that international economic policies could have on their nation.
-Jade Wurapa, Siham Ahmed
3. Reduction of Purchases
- Overproduction caused lower prices for produce, not enough Americans to purchase all the extra goods. This resulted in a lower flow of money throughout this sector of the economy. Construction fell by 20% because no one could afford to purchase these goods and services anymore.
- Capital flooded the market (new machines/technology), but there was not enough demand for these goods. This resulted in low wages and many workers were laid off.