Objective: To analyze the effect the car had on U.S. society Ford Model T

Transcription

1 Objective: To analyze the effect the car had on U.S. society Ford Model T

2 A Booming Economy: The 1920 s Income increases Boom Cycle People purchase more goods Companies expand and hire more people Companies earn higher profits

3 Exercise Your Brain! Partner 1 explain to partner 2 how the boom cycle of the automobile industry works. Listen for the switch. Income increases Boom Cycle Companies expand and higher more people People purchase more goods Companies earn higher profits

4 Henry Ford used assembly lines to produce cars.

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6 The efficiency of the assembly line helped to decrease car prices. Ex.) Model-T $ $ $290

7 Instead of meeting on the front porch under the watchful eyes of adults, our young people are now traveling to the next town or city and spending long hours together in what are virtually private rooms on wheels.

8 Effects of the Car Industry steel rubber oil The following industries grew as a result of the booming car industry: construction (roads and bridges) housing (as the suburbs grew) paint glass

9 Seat partner 2 explain to seat partner 1 how at least three other industries were affected by the growth of the automobile industry. Listen for the switch. Exercise Your Brain

10 * Employment and standards of living increased. * As World War I ended, technology focused on consumer goods. Ex) radios, washing machines, telephones, and cars * Increased wages caused an increase in buying power RCA Radiola Super VIII

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13 Do Now On a scrap piece of paper, explain three effects the mass production of the automobile had on society.

14 Objective: To examine the methods used to increase the economic boom in America.

15 New Goods for Sale In the 1920 s, people began to purchase items they couldn t afford through the use of installment buying, or buying on credit. Installment buying increased the demand for goods, while consumer debt increased.

16 Advertising In the 1920 s business used advertising to convince consumers that they would be happier if they bought their product.

17 How does the stock market work? You buy 100 shares of stock of x $5.00 per share How much money have you invested? $ Scenario #1 stock increases to $20 per share How much are your 100 shares of stock now worth? 100 shares of stock x $20.00 per share $2, How much profit have you made? $2, stock value - $ initial investment $1, net profit

18 How does the stock market work? You buy 100 shares of stock of x $5.00 per share How much money have you invested? $ Scenario #2 stock decreases to $1 per share How much are your 100 shares of stock now worth? 100 shares of stock x $1 per share $ How much money have you lost? $ stock value - $ initial investment $ net loss

19 Stocks Surge Millions of Americans invested in the bull market, becoming rich as stock prices rose. Many Americans borrow a portion of the money to buy stocks (Buying on Margin)

20 Buying Stocks on Margin: Scenario A Hello, sir. I would like to purchase 100 shares of stock in the Ford Motor Company. How much is it going to cost me? investor stock broker

21 Buying Stocks on Margin: Scenario A Well, Ford stock costs $10 per share. You want to buy 100 shares? Figure it out yourself, smartguy! investor stock broker

22 Buying Stocks on Margin: Scenario A Ummm 100 shares x $10 per share = $1, Oh, well. I only have $100. I can t afford 100 shares. investor stock broker

23 Buying Stocks on Margin: Scenario A No, problem! Just give me $100 and you can owe me the rest! investor stock broker

24 Buying Stocks on Margin: Scenario A Like, how much would that be? Let me think $1,000 worth of stock - $100 paid = $900 owed investor Alright, it s a deal!! stock broker

25 Buying Stocks on Margin: Scenario A Six months later, Ford stock doubles to $20 per share. My 100 shares are now worth shares x $20 per share $2,000 investor stock broker

26 Buying Stocks on Margin: Scenario A That s great! Now pay me the $900 you owe me! investor stock broker

27 Buying Stocks on Margin: Scenario A No problemo! It was a pleasure doing business with you! investor stock broker

28 Buying Stocks on Margin: Scenario A investor Now let s figure out how much money I made! $2,000 net worth - $900 owed $1,100 profit - $100 initial investment $1,000 net profit

29 Buying Stocks on Margin: Scenario B Six months later, Ford stock decreases to $1 per share. My 100 shares are now worth shares x $1 per share $100 investor stock broker

30 Buying Stocks on Margin: Scenario B Too bad, hotshot! You still owe me that $100 plus another $800! investor stock broker

31 Buying Stocks on Margin: Scenario B But I m broke! What am I going to do! investor stock broker

32 Buying Stocks on Margin: Scenario B I don t care what you do as long as you pay me back! investor stock broker

33 Some people began to buy stocks on margin, which is similar to installment buying. * Unquestioned faith in the bull market helped lead to the Great Depression!