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 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.