Question

Which statement best evaluates the impact of the 1929 stock market crash on Europe?

Answer 1

You didn't give statement choices, but the answer I would suggest is something like this:

The Depression spread to Europe because of the United States pulling back from financial involvements elsewhere in the world.  American banks stopped investing, and demanded repayment of loans.

A key example would be the case of Germany.  After the Great War (World War I), Germany was required to pay heavy reparations payments to Britain and France.  Meanwhile, Britain and France owed repayment of funds to the United States for borrowing they had done during the war.  So the United States had been supporting Germany in the 1920s with loans.  When the USA could no longer afford to extend loan monies to Germany after the market crash of 1929, that sent Germany's economy spiraling even deeper into the Depression than was felt in the United States.

Answer 2

The United States eliminated loans to Europe that caused Germany to default on its reparation payments to France.