Final answer:
The stock market crash of 1929 is an example of contagion, where panic and selling quickly spread in the market, causing a downward spiral. Psychological concerns about economic recovery and limited cash surpluses played a role in the contagion effect.
Step-by-step explanation:
The statement about the 1929 stock market crash can be considered an example of contagion. Contagion refers to the rapid spread of panic and selling in the market, causing a downward spiral. In the case of the crash, once panic started, people started selling their stocks, which further decreased the market value and fueled the panic. The psychological concern about economic recovery and limited cash surpluses also contributed to the contagion effect.