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The steep fall on the Wall Street Exchange affected not only the US but also ______.
1. British
2. Germany
3. Russia
4. France

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Correct Answer - Option 2 : Germany
  • Stock market crash of 1929, also called the Great Crash, a sharp decline in U.S. stock market values in 1929 that contributed to the Great Depression of the 1930s.
  • It not only affected the US but also Germany.
  • As the world economies were linked through international business, the Wall Street Crash resulted in an international depression.

  • As a result of this international depression, and the need for money at home, the USA called in their international loans.

  • Germany was reliant on international loans and investment. They had used these, as explored above, to rebuild their economy after the war and hyperinflation crisis, and invest in new schools, businesses and hospitals. As the USA removed this investment, Germany fell into another economic crisis.

  • The Great Depression lasted approximately 10 years and affected both industrialized and non-industrialized countries in many parts of the world.
  • During the mid-to-late 1920s, the stock market in the United States underwent rapid expansion.
  • It continued for the first six months following President Herbert Hoover’s inauguration in January 1929.
  • The prices of stocks soared to fantastic heights in the great “Hoover bull market,” and the public, from banking and industrial magnates to chauffeurs and cooks, rushed to brokers to invest their liquid assets or their savings in securities, which they could sell at a profit.
  • Billions of dollars were drawn from the banks into Wall Street for brokers’ loans to carry margin accounts. The spectacles of the South Sea Bubble and the Mississippi Bubble had returned.
  • People sold their Liberty Bonds and mortgaged their homes to pour their cash into the stock market.
  • In the midsummer of 1929, some 300 million shares of the stock were being carried on margin, pushing the Dow Jones Industrial Average to a peak of 381 points in September. 
  • Prices began to decline in September and early October, but speculation continued, fueled in many cases by individuals who had borrowed money to buy shares—a practice that could be sustained only as long as stock prices continued rising.
  • On October 18 the market went into a free fall, and the wild rush to buy stocks gave way to an equally wild rush to sell.
  • The first day of real panic, October 24, is known as Black Thursday; on that day a record 12.9 million shares were traded as investors rushed to salvage their losses.

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