What were three contributing factors to the Great Depression?

Answer 1

1. Stock Market Crash of 1929: The most well-known trigger of the Great Depression was the sudden and severe collapse of the stock market in October 1929. This event led to widespread panic selling of stocks, causing prices to plummet and wiping out billions of dollars in wealth.

2. Bank Failures: As the economy worsened after the stock market crash, many banks began to fail. People rushed to withdraw their money, causing a run on the banks. Without enough cash reserves to cover these withdrawals, many banks were forced to close, further worsening the economic crisis.

3. Reduction in Consumer Spending: The combination of the stock market crash and widespread bank failures resulted in a significant decrease in consumer confidence and spending. As unemployment skyrocketed and businesses struggled to stay afloat, people cut back on their purchases, leading to decreased demand for goods and services, further exacerbating the economic downturn.