Final answer:
The economic downturn of 1819, or the Panic of 1819, was primarily caused by currency speculation, poor banking practices, and a dramatic fall in agricultural prices due to a decline in European demand post-Napoleonic Wars. Option D is correct.
Step-by-step explanation:
One of the major causes of the economic downturn of 1819, also known as the Panic of 1819, was currency speculation. After the War of 1812, with rising prices, there was an increase in inflation and speculation fueled by both domestic and international factors. Poor banking practices contributed as well, with risky loans by the Second Bank of the United States and an overextension of credit by state banks.
Prices for American agricultural products such as cotton and wheat fell dramatically as Europe recovered from the Napoleonic Wars and became less dependent on American produce. This was compounded by the Second Bank's shift to a deflationary policy in late 1818, which required the repayment of loans and conversion of state banknotes to specie, leading to bank failures and an economic depression.