Stock Market Crash of 1929 Quiz

What was one of the main causes of the 1929 Stock Market Crash?

• High agricultural exports

• Rampant speculation and buying on margin

• Increased wages for industrial workers

• Strict government regulation of the stock market

What does buying stock “on margin” mean?

• Paying the full price of the stock up front

• Borrowing money to buy stock, often up to 90% of the stock's value

• Buying stock only during a market dip

• Selling stock before its value increases

What happened on “Black Tuesday,” October 29, 1929?

• The Federal Reserve lowered interest rates

• The government shut down Wall Street

• A record 16.4 million shares were traded, and the Dow dropped another 12%

• President Hoover declared a national emergency

How did J.P. Morgan Jr. and other bankers attempt to stop the crash on Black Thursday?

• Closing the stock market early

• Pooling $240 million to buy stocks and stabilize prices

• Announcing government bailout plans

• Creating new bank loans for investors

What was one immediate consequence of margin calls during the crash?

• Investors earned higher dividends

• Stock prices began to rise again

• Investors had to repay loans with stocks that had become worthless

• Most banks forgave all investment-related loans

By the end of 1929, how many banks had failed due to the crash?

• About 100

• Over 600

• More than 2,000

• None; banks were unaffected

Which of the following best describes President Hoover’s response to the crash?

• He immediately passed sweeping relief laws

• He nationalized the banking industry

• He insisted that the “fundamentals are sound” and urged patience

• He resigned from office

How did the crash affect employment by spring of 1930?

• Unemployment dropped to historic lows

• There was no change in employment

• Unemployment rose to 3 million as factories and construction halted

• Employment increased due to government programs

What long-term economic effect did the crash have on the United States?

• It led to the rise of the Gilded Age

• It ended government involvement in the economy

• It prompted government reforms like the SEC and New Deal programs

• It caused a permanent stock market shutdown

What was the Hawley-Smoot Tariff’s role in the global downturn?

• It helped boost American exports

• It raised duties to 60%, choking world trade

• It encouraged more borrowing from Europe

• It lowered prices for American farmers