Explain the causes of the stock market crash. What role did the ...

[hbsimmons88]

Question 1

Which of the following was a consequence of the Great Depression?
 
  A) The communist economy of the Soviet Union came perilously close to collapse.
  B) The worlds powerful nations all increased their military spending.
  C) The United States, England, and France all abandoned capitalism.
  D) The worlds powerful nations all moved toward greater government intervention in their economies.

Question 2

Why was the Soviet Union immune to the Great Depression?
 
  A) Japan and China greatly supported its economy.
  B) Its trade connections with Europe were very strong.
  C) It had huge reserves of capital.
  D) It had already abandoned capitalism.

Question 3

Italy, Germany, and Japan responded to the Depression by __________
 
  A) increasing military spending
  B) cutting all government programs
  C) eliminating national debt
  D) reducing the size of their armies

Question 4

Explain the causes of the stock market crash. What role did the crash play in causing the Great Depression? What other factors were at play?
 
  What will be an ideal response?

[asware1]

Answer 1

Answer: D

Answer 2

Answer: D

Answer 3

Answer: A

Answer 4

Answer: The ideal answer should include:

• 
  The October 29, 1929, stock market crash marked the symbolic end of the 1920s.
  


• 
  The causes of the stock market crash and the decade-long depression that followed were complex and varied.
  


• 
  Margin buying exposed investors to enormous risks.
  


• 
  When the price of stocks spiraled out of control, far beyond their actual value, creditors demanded repayment of their loans, and investors were unable to pay their debts.
  


• 
  The collapse of the stock market alone would not necessarily have caused such a severe and prolonged depression.
  


• 
  Poor decision making by financial and political leaders exacerbated underlying weaknesses in the economy.
  


• 
  Within the United States, the unequal distribution of wealth exacerbated the effects of the economic downturn.
  

[hbsimmons88]

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[Hdosisshsbshs]

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