Stock Markets Exposed
Why did Over.Production cause the Stock Market Crash ?
Can some1 (in their owns words) give me a 1 paragraph detail in why overproduction was responsible for the stock market crash in 1929? I am very sick and i can't think straight and this must be handed for homework tomorrow or i fail. Plz help !
Public Comments
- Overproduction was due too the increase in consumer products and goods being made. Purchasing reache an all time high with people promising to pay back their items on credit. However, after the 1920s ended and the economic advantage decreased, many people in debt were unable to pay back their credit which led to millions of declined loans. Overproduction happened because of the demand to meet all of the purchases. New machinery happened to make items produce faster and wages stayed the same until the prices plummented thus ruining overproduction and crashing.
- Over speculation and margin buying were largely responsible for the Stock Market Crash. Overproduction was however a major causal factor leading to the Great Depression. One can say that overproduction led to a decline in sales for many commodities and as a result of the market being inundated with goods companies were not selling their products and that resulted in the value of their stock going down. When the value of stock went down people who had bought that stock on margin in the hope of selling it at a profit (speculation) found themselves owing more for stock than it was worth. That in turn led to panic selling and that led to the crash.
