Two causes of the stock market crash of 1929 were speculative trading and excessive buying on margin. Speculative trading refers to investors purchasing stocks solely to sell them for a quick profit, resulting in inflated stock prices. Buying on margin allowed investors to purchase stocks with borrowed money, creating a situation where many investors were unable to repay their loans.
Two effects of the stock market crash were the Great Depression and a significant decline in consumer spending. The crash led to a widespread economic downturn known as the Great Depression, characterized by high unemployment rates, bank failures, and a decrease in GDP. Additionally, the crash caused a sharp decrease in consumer spending as individuals faced financial hardships and lacked confidence in the economy.
In 3–5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.,,
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