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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Banks did not pay interest on savings accounts.
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There was a shortage of goods.
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There was a much higher return in stocks than in savings.
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Most Americans were out of work.
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Detailed explanation-1: -The main cause of the Wall Street crash of 1929 was the long period of speculation that preceded it, during which millions of people invested their savings or borrowed money to buy stocks, pushing prices to unsustainable levels.
Detailed explanation-2: -Throughout the 1920s a long boom took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value. Many investors became convinced that stocks were a sure thing and borrowed heavily to invest more money in the market.
Detailed explanation-3: -Answer and Explanation: Many people invested in the stock market in the 1920s because it was easier to do so than ever before. They could now buy ‘on margin, ’ or on credit, so people were able to purchase stocks that they would normally not have been able to buy if they had had to pay cash for them.
Detailed explanation-4: -Summary and definition: The Long Bull Market of the 1920s was fueled by the prosperity and economic boom enjoyed in the Roaring Twenties that led to Consumerism in America, easy credit and increased debt. Stock Brokers encouraged the practice of buying stocks “on margin” meaning buying stocks with loaned money.