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Causes of the Stock Market Crash of 1929

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Causes of the Stock Market Crash of 1929

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Questions and Answers

What triggered concerns on Wall Street in early 1929 according to the text?

The warning from the Federal Reserve about speculation in the stock market (correct)

The announcement of a new technology development

The lack of investment in stocks

The booming economy

How did consumer credit contribute to the eventual banking crisis?

By discouraging people from borrowing money to invest in the stock market

By ensuring that all stocks were purchased with cash

By leading to investments in stocks that could not be supported (correct)

By positively impacting banks' financial stability

What was a major issue faced by banks following the Wall Street Crash of 1929?

Quick recovery due to sound financial practices

No impact on banks' stability

Loss of clients' savings due to investments in the stock market (correct)

Increase in depositors' trust

Why did the economy suffer for years after the initial stock market crash according to the text?

As a result of lack of capital and hesitancy on the part of investors Signup and view all the answers

What was a consequence of American leaders allowing unfettered growth and investment without adequate study of the market?

The Wall Street Crash of 1929 Signup and view all the answers

What characterized the Roaring Twenties period economically?

Great prosperity for large corporations Signup and view all the answers

How did market saturation contribute to the economic downturn according to the text?

By leading to stagnation as the market could not support further investment Signup and view all the answers

What was a key factor that led to extreme distrust of the stock market following the October 1929 crash?

Loss of value in stocks purchased using loans Signup and view all the answers

What was one of the main causes of the Stock Market Crash of 1929 as per the text?

Rapid corporate growth throughout the 1920s Signup and view all the answers

Which factor contributed significantly to the growth of the stock market from 1921 to the summer of 1929?

Borrowed money being invested in the stock market Signup and view all the answers

What event occurred on October 29, 1929, related to the stock market?

The market crashed and lost significant value Signup and view all the answers

What effect did the stock market crash have on the Dow Jones Industrial Average by November 1929?

It lost roughly half of its value Signup and view all the answers

What characterized the decade leading up to the Stock Market Crash of 1929, according to the text?

Economic optimism and over-speculation in the stock market Signup and view all the answers

Why did individuals and corporations borrow money to invest in the stock market during the Roaring Twenties?

Because of high confidence and over-speculation in stocks Signup and view all the answers

What major economic event followed the Stock Market Crash of 1929?

'The Great Depression' that haunted the American economy for years Signup and view all the answers