How did the U.S. stock market contribute to economic instability before the Great Depression? A. Stock traders were extremely cautious about investing incompancies that relied on new technology. B. Many people took out risky loans that could only be repaid if stockprices continued to rise. C. The U.S. government required that all government employees shifttheir savings into stocks. D. Business owners were forced to pay huge fees to have theircompanies listed on the stock market.
History · Middle School · Tue Nov 03 2020
Answered on
Before the Great Depression, the U.S. stock market contributed to economic instability primarily through option B) Many people took out risky loans that could only be repaid if stock prices continued to rise. This situation led to excessive speculation, buying stocks on margin (using borrowed money) and the overextension of credit. When stock prices plummeted, many couldn't repay their loans, leading to a cascade of financial collapse and contributing to the onset of the Great Depression.