THE GREAT DEPRESSION 1929 1940
THE WALL STREET CRASH OF 1929
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Over 30 000 small-medium banks
|
|
|
Banks prone to bankruptcy if there was a rush to take out deposits
|
|
|
No banks had collapsed prior to 1929
|
|
|
A few large banks, highly regulated by the gov.
|
Detailed explanation-1: -Banks began to fail with the general economic downturn of 1920. For the United States as a whole, 505 banks failed in 1921. Failures continued to rise in the early twenties, averaging over 680 from 1923 to 1929 and peaking in 1926 at more than 950 failures.
Detailed explanation-2: -Deflation increased the real burden of debt and left many firms and households with too little income to repay their loans. Bankruptcies and defaults increased, which caused thousands of banks to fail. In each year from 1930 to 1933, more than 1, 000 U.S. banks closed.
Detailed explanation-3: -Thousands of banks failed during the Depression and loss of confidence caused anxious depositors to create “runs” on banks as they tried to withdraw their money before the banks collapsed.
Detailed explanation-4: -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.