Question 1
In essence, there was rapid expansion of the United States stock market in the 1920s. This expansion was founded on credit. In late 1920s, wild speculation reached its peak, and the price of stocks went too far from their intrinsic value. This led to the 1929 Stock Market Crash. The 1930s ushered a period of the stock market contraction as a consequence of the Great Depression.
Question 2
The United States did not have its factories destroyed during WW1, unlike was the case in some European countries. It is important to note that through necessity, there was significant increase in production as well as manufacturing during the war. For this reason, and several others, the United States emerged from the WW1 stronger, with a booming economy and as an industrial leader.
Question 3
With most people having zero experience in the purchase of securities, Liberty Bonds, “Investing Culture”, Margin Buying managed to get ordinary people acquainted with the purchase of securities. They eased the speculative effort and people borrowed more and more to speculate in the Stock Market. This speculative activity founded on artificial demand pushed share prices to levels way above the actual value of the said stocks.
Question...
References
[FullyFundedTrader]. (2013, Jan 30). 1929 The Great Crash. – A Video about the Stock Market Crash in 1929 [Video File]. Retrieved from https://youtu.be/POMhTJqw1d4
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