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

Apprehend the principles behind disaggregated financial information and its significance for financial analysis.

Understand the criteria for inclusion of subsidiaries in a consolidated income tax return.

Calculate percentage ownership and its impact on income attribution.

Recognize and account for the investment of a subsidiary in its parent company.

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