Final answer:
Stock market speculation, characterized by the use of high levels of margin buying, was the financial practice that most likely contributed to the Great Depression, along with poor income distribution and insufficient banking regulations. These factors led to the stock market crash of 1929 and the subsequent economic downturn that became the Great Depression.
Step-by-step explanation:
The financial practice that most likely contributed to the Great Depression was stock market speculation. This speculation was characterized by the excessive use of margin to buy company shares, allowing investors to borrow a significant portion (90% to 97%) of the purchase price. This system can be effective as long as the stock prices continue to rise, but it also creates a bubble that eventually bursts when credit tightens, margin calls are made, and there are more sellers than buyers.
Factors such as poor income distribution, blind faith in American exceptionalism, and a rampant increase in stock values without corresponding increases in company assets or earnings also contributed to the market crash and the subsequent depression. With the stock market crash of 1929 as the trigger, the lack of economic and banking safeguards combined with a public psyche heavily invested in wealth and prosperity allowed the event to spiral into the Great Depression.
Ultimately, it was the weaknesses in the economy, specifically in the nation's banking system, that stood out as underlying issues when the stock market plummeted, bringing numerous bank failures and widespread economic turmoil.