Question

Examine the following list of factors. Then, select those that either caused or were an immediate result of the stock market crash and the ensuing

depression. Check all that apply.
Increased buying of stocks on credit
Fallout from the "court-packing" scheme
Income-tax cuts pumping money into the market
Marked decline in construction industry
Roosevelt's implementation of the principles of Keynesian economics

Answer 1

The factors that either caused or resulted from the stock market crash and the ensuing Great Depression include increased buying of stocks on credit and a marked decline in the construction industry, while the fallout from the "court-packing" scheme, income-tax cuts, and Roosevelt's Keynesian policies were not immediate causes or results.

Step-by-step explanation:

Several factors either caused or were immediate results of the stock market crash and the ensuing Great Depression. The increased buying of stocks on credit is one such factor, as excessive use of margin to buy shares led to inflated stock prices and eventually to a market bubble. A marked decline in the construction industry is also identified as a contributing factor, as it indicated a slowdown in economic activity. On the other hand, the fallout from the "court-packing" scheme (which is more related to Franklin D. Roosevelt's presidency in 1937 and the political landscape rather than the stock market crash or the onset of the depression), income-tax cuts (generally seen as a stimulative measure rather than a cause of a downturn), and Roosevelt's implementation of the principles of Keynesian economics (which is a response to the depression rather than a cause) were not immediate causes or results of the stock market crash.

The primary reasons for the collapse of the stock market include international economic woes, poor income distribution, a speculative bubble fueled by buying on margin, and the psychology of public confidence leading to a panic once the market began to fall. These factors interconnectedly contributed to the overall economic decline.

Answer 2

Caused Stock Market Crash

• Increased buying of stocks on credit
• Income-tax cuts pumping money into the market
• Marked decline in construction industry

In the 1920s U.S. stock prices were rising at an unsustainable rate so much so that a lot of people wanted to benefit from the stock market. They pumped everything they had inside including the income tax cuts by the government. They even used credit/ loans to buy stocks.

In 1928, the Fed was worried about how overheated the economy was and raised interest rates which hurt the construction industry which relied heavily on loans.

These factors led people to become desperate such that when the market declined even a little bit, people began to sell in large quantities so as to make back their investments and so the stock market crashed.

Result of the Crash.

• Fallout from the "court-packing" scheme
• Roosevelt's implementation of the principles of Keynesian economics

After the Crash, Roosevelt came to power and began to implement Keynesian economic principles which called for government intervention to save a failing economy as opposed to waiting for it to correct itself. When the Supreme Court kept threatening to impede his programs, Roosevelt tried to engage in Court-Packing which would involve increasing the number of Supreme Court Justices.