In 3–5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.
Two causes of the stock market crash of 1929 were over-speculation and excessive borrowing by investors. Over-speculation occurred as investors poured money into the stock market, driving up prices to unrealistic levels. Excessive borrowing allowed investors to buy stocks on margin, meaning they only had to pay a fraction of the stock's value upfront.
Two effects of the stock market crash of 1929 were the Great Depression and a significant decrease in consumer spending. The crash triggered a chain of events that led to the Great Depression, causing widespread unemployment, bank failures, and a severe economic downturn. As people lost their savings and jobs, they significantly reduced their spending, leading to further economic decline.