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9 July, 06:42

How did easy credit and buying stock on margin provide both costs and benefits to us economy?

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  1. 9 July, 09:16
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    It was supposed to benefit the economy because it would make everyone rich and everyone would pay taxes and everything would work well. However, it ruined the economy because people bought stocks with money that they didn't have, borrowed from their brokers, and then instead of the stocks increasing in value, they would decline in value and everyone would start losing money at a rapid pace. This kind of behavior caused the Stock Crash of 1929.
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