ECON1102 Lecture Notes - Lecture 3: Microeconomics, Protectionism, International Trade
Document Summary
On october 24 (black thursday) stock prices dropped 15 to 20% before being supported by buying from a pool of bankers. Market was closed with only a small loss (down 6 to 299), trading was nearly. 12. 9 million shares, about triple the normal volume. Panic took over and on the following monday the dow fell 38 points to 260. The next day (black tuesday) it slid another 30 points. By november 13, the dow was at 198. It would drop to about 10% of it pre-crash value. Financial crisis: the stock market crash ushered in a full-blown financial crisis in the banking sector creating negative loops between real and financial sectors. This is fine when people don(cid:495)t all rush back to the bank to get their money out at the same time (bank run) occurred during great. Depression (1930 and 1931: banks failed: everyone took their cash out and the banks investments had failed panic shifted internationally banks failed internationally.
