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Lecture 14.pdf
The document discusses the history of banking and leverage in the United States. It explains key banking concepts like liquid deposits, loans, debt, equity, and leverage ratios. It provides examples of how using leverage with borrowed money can either double your return if successful or cause bankruptcy if unsuccessful. It also discusses how banks can fail if they do not have enough cash or if the value of their loans decreases.
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Lecture 14.pdf
- 1. Lecture 14 The EconomicHistory of the United States
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- 15. Leverage Start with $10 Borrow$90 Buy for $100 Sell for $110 Payback $90 End with $20 Double your $10
- 16. Leverage Start with $10 Borrow$90 Buy for $100 Sell for $90 Payback $90 End with $0 Lost your $10
- 17. Leverage Start with $10 Borrow$90 Buy for $100 Sell for $80 Payback $90 End with -$10 Bankruptcy
- 18. Assets - Own Liabilities- Owe Net Worth - Difference
- 19. How can abank "fail" Not enough cash Value of the loans decrease
- 21. What government serviceexpansion helped Montgomery Ward and Richard Sears? 2. What did Montgomery Ward offer to counter customer’s perception of risk? 3. What did Sears offer to counter customer’s perception of risk? 4. What happened on May 4, 1886, that ended the sympathy for labor unions from the middle-class, mainstream newspapers, law enforcement, and government? 5. Who were the three competitors in the New York newspaper businesses? 6. How did the U.S. acquire Alaska? From whom, the price, and year. 7. What happened in New Jersey in 1888 than dramatically changed the way corporations did business? 8. What was the first American company to be valued over $1 billion and when? 9. What is the connection between Emma Goldman and Teddy Roosevelt? 10. What major advance in global trade occurred under Teddy Roosevelt? 11. What does Battle Creek Michigan have to do with breakfast? 12. What were the two plant products in the first version of Coca-Cola? 13. Why were newspapers editors reluctant to expose dangerous substances in patent medicines? 14. What book highlighted the problems of meatpacking industry in the U.S.? Title, author, and year published. 15. What two innovations made Chicago the center of the meatpacking industry in the U.S.? 16. What did Henry Ford and Billy Durant do 1908 that dramatically changed the U.S. automobile industry? 17. What event in 1912 demonstrated the value of wireless telegraphy? 18. What demographic condition made the U.S. reluctant to enter World War I? 19. What role did the passenger ship Lusitania play in World War I? 20. What three companies formed RCA and why? 21. What sport first made radio a broadcast medium? 22. What industry in California benefited from the 18th Amendment? 23. Why did Walgreens benefit from the 18th Amendment? 24. What is the relationship between the 16th Amendment and 18th Amendment ? 25. What bank failed in 1930 that caused a ripple effect?