5. In 3-5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.
One cause of the stock market crash of 1929 was over-speculation, as investors were buying stocks on margin with borrowed money, which artificially inflated stock prices. Additionally, the economy was experiencing an uneven distribution of wealth, with a majority of Americans earning low wages and not participating in the stock market. This led to a speculative bubble that eventually burst.
Two effects of the stock market crash of 1929 were the Great Depression and a severe decline in consumer spending. The crash triggered a chain reaction of economic downturn, resulting in widespread unemployment, bank failures, and a decline in industrial production. These factors led to a decrease in consumer confidence and spending, further exacerbating the economic crisis.