Question

Use the cause and effect table to answer the question.

Cause and Effect of Buying Stocks on Margin
Cause Effect
Investors often bought stocks “on margin.” ?
Which event best completes the table?

(1 point)

Individual stocks experienced relatively little change in price over time.


Government regulations led people to pull their money from the market.


Declines in stock prices eliminated personal savings and left investors in debt.


A booming stock market distributed wealth broadly across a majority of Americans.

Answer 1

Declines in stock prices eliminated personal savings and left investors in debt.

Buying on margin meant people borrowed to buy stocks; when prices fell those losses wiped out savings and left borrowers owing money.