THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the price of farm equipment fell
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international trade boomed
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their stocks became worthless
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social security went bankrupt
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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: -For example, suppose an investor buys 1, 000 shares in a company for a total of $1, 000. Due to a stock market crash, the price of the shares drops 75%. As a result, the investor’s position falls from 1, 000 shares worth $1, 000 to 1, 000 shares worth $250.
Detailed explanation-3: -(1) The stock market crash of 1929 shattered confidence in the American economy, resulting in sharp reductions in spending and investment. (2) Banking panics in the early 1930s caused many banks to fail, decreasing the pool of money available for loans.
Detailed explanation-4: -In one month, the market lost close to 40 percent of its value. Although only a small percentage of Americans had invested in the stock market, the crash affected everyone.
Detailed explanation-5: -Effects of the 1929 Stock Market Crash: The Great Depression The stock market crash of 1929 was not the sole cause of the Great Depression, but it did act to accelerate the global economic collapse of which it was also a symptom.