Advanced Placement US History (AP US History) Practice Exam

The stock market crash of 1929 is widely credited with initiating the Great Depression due to its immediate and profound impact on the economy. On October 29, 1929, known as Black Tuesday, stock prices plummeted, leading to a significant loss of wealth and confidence among consumers and investors. This crash disrupted financial markets, causing widespread panic and a sharp decline in consumer spending and investment.

The crash revealed underlying weaknesses in the economy, such as over-speculation, excessive debt, and reliance on borrowed capital. With the stock market in turmoil, banks began to fail, leading to a cascade of economic failures, including business bankruptcies, rising unemployment, and decreased production. The psychological impact of the crash also exacerbated economic conditions by leading to a decline in consumer confidence and increased hoarding of cash, further stalling economic growth.

The other events listed, like the Dust Bowl and the banking crisis of 1933, were significant in their own right but occurred later and were effects of the initial downturn triggered by the stock market crash. The end of World War I, while impactful to the economy, did not directly cause the conditions that led to the Great Depression. Thus, the stock market crash of 1929 serves as the pivotal moment