Speculation's Role in Wall Street Crash

A situation where supply exceeds demand, leading to lower prices and decreased profits. This was a major factor in the Wall Street Crash, especially in industries like agriculture and consumer goods.

A situation where consumers don't spend enough money on goods and services, leading to a decline in sales and economic activity. This was a key issue in the crash as many Americans couldn't afford the goods being produced.

A 1922 law that raised tariffs (taxes on imported goods) to protect American businesses from foreign competition. This backfired by prompting European countries to impose retaliatory tariffs, restricting trade and harming American businesses.

A system where the government has limited involvement in the economy, allowing businesses to operate with minimal regulation. While this encouraged growth initially, it also led to risky practices like reckless lending that contributed to the crash.

A situation where consumers have already bought most of the available products, leading to a decline in sales. This was a factor in the crash as Americans who could afford cars, radios, and refrigerators had already purchased them.

The large economic difference between the wealthy and the poor. This was a problem in the 1920s, as most Americans lacked the spending power to sustain demand for goods, making the economy unstable.

Uneven distribution of income among the population. This was a problem in the 1920s, as the wealthy controlled a large portion of the nation's income, while most Americans struggled.

Gambling on the stock market by buying and selling shares with the hope of making a quick profit. This was a major cause of the crash as investors were overconfident and prices rose to unsustainable levels.

The economic policies implemented by the Republican Party in the 1920s, which included laissez-faire governance, protective tariffs, and tax cuts. These policies encouraged growth but also created weaknesses in the economy and contributed to the crash.

A situation where asset prices rise rapidly and unsustainably due to excessive buying driven by expectations of further price increases, often fueled by borrowed money.

Purchasing stocks by paying only a portion of the price upfront (usually 10%) and borrowing the rest from a broker, with the expectation of profiting from future price increases.

A risky belief that quick and easy profits can be made through investments without careful research and planning, often fueled by greed and speculation.

Stock prices that rise beyond their true value, based on unrealistic expectations and inflated buying, making them vulnerable to a correction.

When investors rush to sell their assets, often driven by fear or uncertainty, causing a sudden and dramatic drop in prices.

A situation where banks are unable to meet their financial obligations due to widespread defaults on loans or loss of confidence in the banking system.

Speculation, while not the sole cause of the crash, acted as a catalyst to reveal preexisting vulnerabilities in the U.S. economy, leading to a magnified impact.

Speculation played a crucial role in destabilizing the financial system, fueling the stock market bubble and magnifying the impact of the crash.