Final answer:
The Wall St. Crash initiated a severe economic downturn leading to bank failures, widespread unemployment, and prolonged suffering during the Great Depression. It prompted policy reforms and transformed the American economy and society.
Step-by-step explanation:
The long-term effects of the Wall St. Crash were profound and far-reaching. After the stock market lost more than half its value, plummeting from $64 billion to around $30 billion, a cascade of financial hardships ensued. Banks failed, individuals lost their savings, and companies downsized, leading to mass unemployment and a dramatic drop in consumer spending. The Great Depression that followed reshaped American society and had a severe global economic impact.
The financial instability triggered by the crash led to a nationwide loss of confidence, bank runs, and insolvencies, which effectively constricted credit and financial growth.
The shock of the crash, followed by a lack of effective governmental intervention at the time, turned a market downturn into the most severe economic depression in history. This period was marked by a significant shift in the American financial landscape, policy reforms, and a reevaluation of the capitalist system.