USA HISTORY

Detailed explanation-1: -What caused the Wall Street crash of 1929? 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: -This meant that many investors who had traded on margin were forced to sell off their stocks to pay back their loans – when millions of people were trying to sell stocks at the same time with very few buyers, it caused the prices to fall even more, leading to a bigger stock market crash.

Detailed explanation-3: -The event marked the beginning of the Great Depression, a worldwide decade-long economic depression. It would take 25 years for the market to regain the value lost. The crash had three main causes: buying on margin, overproduction of goods, and laissez-faire government policies.

Detailed explanation-4: -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.

Detailed explanation-5: -Margin trading can lead to significant gains in bull markets (or rising markets) since the borrowed funds allow investors to buy more stock than they could otherwise afford by using only cash. As a result, when stock prices rise, the gains are magnified by the leverage or borrowed funds.