In 3-5 sentences, explain 2 causes and 2 effects of the stock market crash of 1929.
(4 points)
Two causes of the stock market crash of 1929 were overvalued stock prices and excessive speculation. Stock prices had surged in the years leading up to the crash, with investors buying stocks on margin (using borrowed money) and driving prices to unsustainable levels. Another cause was the lack of government regulation and oversight, which allowed for risky and fraudulent practices to occur unchecked.
Two effects of the stock market crash of 1929 were the Great Depression and widespread poverty. The crash led to a severe economic downturn, with businesses collapsing, unemployment rates soaring, and banks failing. Many people lost their life savings, homes, and jobs, leading to a period of immense hardship and suffering for millions of Americans. The crash also had global consequences, as countries around the world felt the impact of the economic crisis.