Which one of the following was a secondary effect of the stock market crash of 1929?
A) an increase in the money supply in the early 1930s
B) a decline in consumption expenditures because of the reduction in the wealth of stockholders
C) an increase in the supply of loanable funds as people transferred funds from the stock market into savings accounts
D) an increase in tax revenues as the sellers of stocks paid the capital gains tax on stocks that had appreciated during the 1920s

Question

Quizplus · Accepted Answer

The stock market crash of 1929 led to a decline in consumption expenditures because many stockholders lost a significant portion of their wealth. This, in turn, led to a decrease in overall economic activity and contributed to the onset of the Great Depression. Choices A, C, and D are not accurate secondary effects of the stock market crash.

Which One of the Following Was a Secondary Effect of the Stock