Question

The event generally considered the START of the Great Depression in the United States was A) the end of World War I. B) the crash of the stock market. C) failure of the commodity market. D) the outbreak of the influenza epidemic.

Answer 1

B)

The huge  crash of the stock market in November of 1929 is generally considered to be the start of the Great Depression in the United States. It then led to hundreds of bank failures each year.

Answer 2

Correct answer: B) The crash of the stock market.

Context/details:

There was much speculative buying on the stock market in "the Roaring '20s," as the decade was known.  In the 1920s, people were so eager to invest and earn profits through the stock market that they bought stocks "on margin."  In other words, they paid for only a marginal percentage of the stocks with their own funds, and borrowed bank funds for the rest of the purchase.  That meant the banks were complicit in this arrangement too, by allowing those sorts of loans. By the late 1920s, 90% of the purchase price of stocks was being made with borrowed money.  This inflated the market in a way that spiraled out of control, and in 1929 the market crashed.  This was the event that initiated the Great Depression that took hold during the 1930s.