Question

List at least one factor that contributed to the crash of the Stock Market and the Great Depression.

Answer 1

A key factor in the crash of the Stock Market in 1929 and the subsequent Great Depression was the contagion effect of public panic, accompanied by poor income distribution, international economic difficulties, and failing banking practices.

Step-by-step explanation:

Factors Contributing to the Stock Market Crash and the Great Depression

One significant factor that contributed to the crash of the Stock Market in 1929 and the onset of the Great Depression was the contagion effect of public panic. During the prosperous 1920s, the public's confidence in perpetual prosperity drove the market ever higher. However, once the sell-off began in late October, the panic spread quickly, causing a massive decline in stock values. This loss of confidence was compounded by poor income distribution, international economic woes, and the impact on the national banking system. These combined not only contributed to the initial crash but also prolonged the downturn of the market into the 1930s. Factors such as speculative buying on the margin, the use of credit, and the lack of a robust consumer demand exacerbated the challenges faced by the American economy.

Answer 2

→ stock market speculation

→ too much buying of stocks on margin

→ low farm prices

→ bank failures

→ too much reliance on consumer credit

→ a drop in consumer spending

→ industrial overproduction

→ failing consumer confidence