1929 Quiz: Stock Market Crash of 1929 Questions

Study Notes

The Great Depression

The Federal Reserve raised concerns about speculation in the stock market in early 1929, warning that too much money was invested in profiting from stocks rather than supporting the goods those stocks represented.
The stock market crash of 1929 occurred in late October, marking the beginning of the Great Depression.
The crash was triggered by over-confidence in the stock market, leading to extreme distrust of the market.
The economy suffered for years due to the initial crash and later lack of capital and hesitancy on the part of investors.

Wall Street Crash and Its Aftermath

Banks struggled for years after the crash because they were responsible for loans issued to speculators before the crash.
Many banks had invested their own holdings in the stock market and lost their clients' savings.
When it became clear that banks could not insure their depositors' money, panic ensued, shaking Americans' faith in banks and the stock market.

The Roaring Twenties

The 1920s were a time of great prosperity for many, especially large corporations, due to the development of new technology and refined industrial methods.
The decade became known for its progressive social changes and economic growth, with businessmen and their companies amassing unheard of wealth.
Much of this newfound wealth was invested in the stock market, leading many to believe that the market could not fail.

Market Saturation

The stock market was saturated in early 1929, with a small market slide in the spring of that year indicating that boundless confidence in Wall Street was likely unfounded.
Investment merely stagnated, rather than crashing, indicating that the market simply could not support further investment.

Consumer Credit

Consumer credit was a key factor that led to market saturation and the eventual banking crisis.
People borrowed money to invest in the stock market, which meant stocks were purchased with loans instead of cash.

Failure of Leadership

American leaders of the 1920s contributed to the Wall Street Crash of 1929 by allowing unfettered growth and investment without adequate study of the market.
President Herbert Hoover grossly underestimated the seriousness of the crash, along with many other political leaders.
Banks were allowed to engage in market speculation with their clients' money, without a formal separation between banks and markets.

The Great Depression Summary

The stock market crash and subsequent banking crisis created a feedback loop that allowed the economic downturn to last for years.
By 1933, many of the banks throughout the U.S. had failed, having collectively lost more than $100 million of their depositors' money.

Stock Market Crash of 1929

The Wall Street Crash of 1929 was precipitated by financial excess and rapid corporate growth throughout the 1920s.
The stock market had grown at an exponential rate from 1921 to the summer of 1929, largely as a result of borrowed money being invested in the stock market.
The autumn of 1929 saw the stock market plateau briefly, then crash on October 29, 1929.
By November of 1929, the Dow Jones Industrial Average had lost roughly half of its value from the summer of that year.

Description

Learn about the events that led to the Wall Street Crash of 1929, including financial excess and rapid corporate growth in the 1920s. Discover how the stock market surged and then crashed on Black Tuesday, October 29, 1929. Understand the impact of this event on the economy.