Why was the stock market crash of 1929 a disaster for the ...

[karateprodigy]

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

Question 2

Capital deepening occurs when
 
  a. the per capita income increases over time.
  b. real GNP increases over time.
  c. the capital/labor ratio does not change.
  d. the capital/labor ratio increases over time.

[olivia_paige29]

Answer to Question 1

(d)

Answer to Question 2

D

[karateprodigy]

Excellent

[milbourne11]

Gracias!