USA HISTORY

Detailed explanation-1: -The stock market crash crippled the American economy because not only had individual investors put their money into stocks, so did businesses. When the stock market crashed, businesses lost their money. Consumers also lost their money because many banks had invested their money without their permission or knowledge.

Detailed explanation-2: -Stock market crashes wipe out equity-investment values and are most harmful to those who rely on investment returns for retirement. Although the collapse of equity prices can occur over a day or a year, crashes are often followed by a recession or depression.

Detailed explanation-3: -This had a tremendous ripple effect on the economy. If a working-class family was unfortunate enough to have their savings held in trust by a failed bank-too bad for them, all their money was lost. As Americans saw banks close and savings disappear, less money was spent on goods and services.

Detailed explanation-4: -By then, production had already declined and unemployment had risen, leaving stocks in great excess of their real value. Among the other causes of the stock market crash of 1929 were low wages, the proliferation of debt, a struggling agricultural sector and an excess of large bank loans that could not be liquidated.