Knowing boom/bust cycles, the stock market, and other economic concepts so you can…

 Stock market an organization that allows companies to sell stock in their company to the general public.  Stock- Part ownership that allows whoever buys a stock in that company that allows the buyer the ability to make more money or lose money depending on how much that company makes.  Ex. Disney stock sells at 20$. You buy 5 shares of stock worth 100$. If stock goes up 5%, then your stocks are worth 105$.

 Boom Cycle- A period of high levels of economic production and demand and low Unemployment rates. People are spending more because they have more. Spending = Good for the Economy.  Ex. The Roaring 20’s, “Reaganomics” in the 1980’s.  Bust Cycle- A period of low levels of economic production and demand and high unemployment rates. People are having trouble making money, therefore can’t spend it.  The Great Depression, Depression of  The U.S. economy is constantly rising and falling.  The Roaring 20’s followed by the Great Depression.

 Following the Civil War, the United States experienced several different boom/bust periods (ex. The Panic of 1873 from the reading).  Following World War I, the U.S had a large economic boom when soldiers returned and stocks became easier to access.  This boom was followed by the Great Depression. The Depression was caused by many different reasons including under consumption of goods, over investment in stocks, and weaknesses in the market.  In the 1970’s the economy wavered because of programs set up to rebuild Europe after WWII and the war in Vietnam. Fixed by Reagan in 1980s with “Reaganomics”.

 High/Low demand for products  Fall in prices  Out of date policies (Bretton Woods following WWII, New Deal following the Great Depression).  Change in foreign policy/foreign imports  Speculative Excess- Believing the value of something is higher than it is and spending your assets on it.  Ex. Beanie Baby craze in 1996.

 What are some of the things that make a business successful? ▪ Key: Field responses from the class.

 Customers  Make $  Well Known  Found correct niche (market to correct crowd).  Marketable  Sometimes a lot of luck is involved.

 Misuse of funds  No market for product  Lack of advertising  Failing to train employees  Lack of goals and business planning.

 Successful investments will make you $.  Must make correct investments on business that have correct niche and will continue to grow.  Help pay for retirement.  Owning enough stock can get you special privileges. Wall Street is the location of the New York Stock Exchange in New York City.

 Be on the cunning edge of technology.  Their stock is on the rise.  Has a very sturdy business plan/structure.  Has found correct niche in their field.

 Create your own business!  Think of a product and fill out the questions on your worksheet.  Work on that until later noted by the teacher.