The stock market crash of 1929 was a major event in history that had a significant impact on the global economy. The two main causes of the crash were an over-inflated stock market and a lack of regulation. The stock market had been rising rapidly in the 1920s, with investors buying stocks on margin and speculating on the market. This created an unsustainable bubble that eventually burst. Additionally, the government had not put in place any regulations to protect investors from the risks of the stock market.
The effects of the crash were far-reaching. It caused a dramatic drop in stock prices, leading to a loss of wealth for many investors. This, in turn, caused a decrease in consumer spending, leading to a decrease in economic activity. The crash also caused a banking crisis, as banks had invested heavily in the stock market and were unable to pay back their loans. This caused a wave of bank failures and further weakened the economy.
In 3–5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.
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