Why Was the Stock Market Crash of 1929 a Disaster

question 3

Multiple Choice

Why was the stock market crash of 1929 a disaster for the economy?

• A) Through the "wealth effect," investors lost paper wealth and consequently ?reduced their spending on goods and services. This led to cutbacks in ?production and jobs.
• B) Businessmen became pessimistic about the future and reduced spending on ?plants and equipment, thus causing reduced production and increased layoffs ?in the capital-goods sector of the economy.
• C) The crash revealed a flawed structure of credit and weak system of banks ?and other financial institutions in the U.S.
• D) All of the above are correct

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Definitions:

Multiply

The process of combining two numbers or quantities to get their product.

Simplify

Reducing a mathematical expression or equation to its most basic form without changing its value.

Special Product Pattern

Formulas that simplify the multiplication of algebraic expressions.

Multiply

The arithmetic operation of scaling one number by another, equivalent to adding a number to itself multiple times.