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which was a cause of the stock market crash in 1929

A: Banks had used the money people had put into banks to play the stock market

B: Banks refused to lend investors the money they needed to keep buying stocks

C: Too many investors tried to get in on buying the best stocks

D: Too few investors were willing to purchase a wide range of stocks

Respuesta :

trombonegoddess16
A. Banks had used the money people had put into banks to play the stock market
During the 1920's people were investing like crazy and they depended on banks to take care of their money. Unfortunately, banks invested that money expecting to gain it back and make a profit, but when the stock market crashed in October of 1929, all the money they invested was lost. People started freaking out trying to get their money out of the banks, but it was lost in the stock market.
MrZieleniewo

Answer:  A. Banks had used the money people had put into banks to play the stock market.

Explanation:

There was much speculative buying on the stock market in "the Roaring '20s," as the decade was known.  In the 1920s, people were so eager to invest and earn profits through the stock market that they bought stocks "on margin."  In other words, they paid for only a marginal percentage of the stocks with their own funds, and borrowed bank funds for the rest of the purchase.  That meant the banks were complicit in this arrangement too, by allowing those sorts of loans. By the late 1920s, 90% of the purchase price of stocks was being made with borrowed money.  This inflated the market in a way that spiraled out of control, and in 1929 the market crashed.

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