How did the stock market affect farmers?
When prices fell they tried to produce even more to pay their debts, taxes and living expenses. In the early 1930s prices dropped so low that many farmers went bankrupt and lost their farms. In some cases, the price of a bushel of corn fell to just eight or ten cents.
What was the impact of the stock market crash on workers and farmers?
1) Management’s disposition to maintain prices and inflate profits while holding down wages and raw material prices meant that workers and farmers were denied the benefits of increases in their own productivity. The consequence was the relative decline of mass purchasing power.
What was the result of overproduction and stock market speculation in the 1920s?
Overproduction led to major price reductions, unemployment, and loans. It was one of the factor that led to the Great Depression and the Stock Market Crash of 1929.
How did speculation affect the stock market?
Speculation. The biggest cause of the stock market crash was speculation. This meant that as the stock prices started rising, more people were demanding more stock, which caused the price to rise even more.
Does a stock market crash affect the economy?
2 Since the stock market is a vote of confidence, a crash can devastate economic growth. Lower stock prices mean less wealth for businesses, pension funds, and individual investors. Companies can’t get as much funding for operations and expansion. When retirement fund values fall, it reduces consumer spending.
Why was speculation bad for the stock market?
Speculators hope for a quick rise in share prices so they can sell for a profit. They do not necessarily think they are buying stock for less than its true value or that the price will continue to rise after they sell. This means that speculation can have a dangerous result for investors.
How did America go from the roaring 20s to a great depression?
There were many aspects to the economy of the 1920s that led to one of the most crucial causes of the Great Depression – the stock market crash of 1929. In the early 1920s, consumer spending had reached an all-time high in the United States. American companies were mass-producing goods, and consumers were buying.
