Question

In 3–5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929. (answer in simple words and grade 10 level)

(4 points)

Answer 1

Two main causes of the stock market crash of 1929 were excessive speculation and buying on margin. Many investors were buying stocks with borrowed money, hoping prices would keep rising, but when they fell, they couldn't pay back their loans. Two effects of the crash were widespread unemployment and bank failures. As many businesses lost money and closed, people lost their jobs, and banks that had invested in the stock market couldn't recover, leading many to fail.