INTER WAR YEARS 1919 TO 1939
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which economic factor contributed most directly to the start of the Great Depression?
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low worker productivity
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high income taxes
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decreasing tariff rates
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buying stocks on margin
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Explanation:
Detailed explanation-1: -Among the suggested causes of the Great Depression are: the stock market crash of 1929; the collapse of world trade due to the Smoot-Hawley Tariff; government policies; bank failures and panics; and the collapse of the money supply.
Detailed explanation-2: -Known as Black Thursday, the crash was preceded by a period of phenomenal growth and speculative expansion. A glut of supply and dissipating demand helped lead to the economic downturn as producers could no longer readily sell their products.
Detailed explanation-3: -The concept of “buying on margin” allowed ordinary people with little financial acumen to borrow money from their stockbroker and put down as little as 10 percent of the share value.
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