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  Chapter Fourteen:

  Gross Domestic Product
  Business Cycles
  Business Revenues
  Trading Volume
  Dow Jones Average
  Crude Oil
  Energy Consumption
  Imports and Exports
  Foreign Investment



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Trading Volume

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The volume of stock transactions expanded greatly after 1970.
Fluctuations in the volume of stock trading were much greater in the early years of the century when economic growth patterns were more volatile. A comparison of trading volume on the New York Stock Exchange during two consecutive five-year periods, for example, shows that annual trading volume decreased by 77 percent from 1909 to 1914 and then increased by 560 percent from 1914 to 1919. After 1960, trading volume increased almost every year. The number of shares traded on the least active day of 1999 greatly exceeded the number traded on the most active day of 1980. 

Trading on the New York Stock Exchange does not tell the whole story, however. For most of the century, trading volume on the New York Stock Exchange constituted about 80 percent of the nation’s total trading volume, which also included other stock exchanges (American, Chicago, Pacific, Philadelphia). A new factor emerged in the 1970s as “over-the-counter” trading evolved into the computerized NASDAQ system under the auspices of the National Association of Securities Dealers. In 1994, for the first time, the number of NASDAQ shares traded surpassed the number traded on the New York Stock Exchange. The gap continued to widen and by 1999, trading volume on the NASDAQ exceeded that of the New York Stock Exchange by more than a third. 

Between the early 1970s and 1999, the aggregate value of NASDAQ shares traded increased from a small fraction of the value of shares traded on the New York Stock Exchange to approximate parity. By the end of the century, the number of companies whose shares were listed by NASDAQ exceeded the number listed by all of the other exchanges combined. NASDAQ-listed companies tended to be younger and were more likely to be in the newer sectors of the economy.

Chapter 14 chart 4

Source Notes
Source Abbreviations

HS series X 531; SA 1979, table 894; SA 1984, table 871; SA 1988, tables 808 and 810; SA 1993, tables 834 and 835; SA 1998, tables 839 and 840; SA 1999, tables 843 and 844; and the NYSE web site, (accessed May 20, 2000). See also The Nasdaq Stock Market Five-Year Statistical Review at (accessed September 4, 2000).


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