Causes of the Stock Market Crash

What caused the stock market crash of 1929?

• prices increased and investors purchased more stock

• People panicked and quickly sold their stocks

• farmers could not produce enough food for the USA

• World War I caused the economy to fall

One cause of the stock market crash was excessive investments made with borrowed money was called –

• tariffs

• overspeculation

• levies

• price quotas

What was a major factor that led to the stock market crash of 1929, characterized by the rapid selling of stocks?

• A) Inflation

• B) Panic selling

• C) High tariffs

• D) Government intervention

Which economic practice, involving buying stocks with borrowed money, contributed to the stock market crash?

• A) Short selling

• B) Margin buying

• C) Day trading

• D) Insider trading

What role did banks play in the stock market crash of 1929?

• A) They increased interest rates

• B) They invested heavily in the stock market

• C) They restricted loans

• D) They bought government bonds

Which event is often seen as a precursor to the stock market crash, involving a significant drop in stock prices?

• A) Black Monday

• B) Black Thursday

• C) Black Friday

• D) Black Tuesday

How did the Smoot-Hawley Tariff Act contribute to the stock market crash?

• A) It increased international trade

• B) It led to trade wars and reduced exports

• C) It stabilized the economy

• D) It lowered taxes on imports

What was the impact of the Federal Reserve's monetary policy on the stock market crash?

• A) It lowered interest rates too much

• B) It failed to provide enough liquidity

• C) It increased government spending

• D) It controlled inflation effectively

Which sector's overproduction was a significant factor in the stock market crash?

• A) Agriculture

• B) Technology

• C) Healthcare

• D) Energy

What was the effect of the stock market crash on consumer confidence?

• A) It increased consumer spending

• B) It led to a rise in consumer confidence

• C) It caused a significant drop in consumer confidence

• D) It had no effect on consumer confidence