Final answer:
The Great Depression was spurred by the stock market crash of 1929, banking failures, and poor economic policies. Over-speculation and poor income distribution led to a massive loss in consumer confidence and demand, while insufficient government intervention delayed recovery.
Step-by-step explanation:
The Great Depression's onset was multifaceted, with several economic weaknesses converging in a period of severe downturn. The stock market crash of 1929, while not the sole cause, significantly contributed to a downward economic spiral. Factors such as banking failures, poor income distribution, and a decline in consumer confidence played key roles in exacerbating the situation.
The decline in stock prices and subsequent bank failures resulted in loss of savings for many Americans, reduced availability of credit for businesses, and precipitated widespread economic hardship. Over-speculation in the stock market, facilitated by the excessive use of margin buying, created a bubble that burst when credit tightened, leading to a drastic drop in consumer demand, further declines in stock prices, and widespread financial ruin.
As unemployment rose and industrial output halved, the pressure was on the government to respond. However, initial reluctance to implement robust government intervention delayed economic recovery, illustrating the complex interplay between market forces and policy decisions during the turbulent period that followed the crash.