What happened when the stock market crashed in october 1929? most banks panicked and bought more stocks. most investors panicked and sold all their stocks. most investors calmly put their money into banks. most banks calmly invested to the stock market.

The answer is the second one. It was the most decimating stock exchange crash in the historical backdrop of the United States when mulling over the full degree and span of its eventual outcomes. The crash, which took after the London Stock Exchange's crash of September, flagged the start of the 12-year Great Depression that influenced all Western industrialized nations.

Most banks panicked and bought more stocks. During the period leading to the stock market crash, there was a period of heightened speculation, which drove most shares way above their intrinsic value due to other external factors such as the decline in other sectors such as agriculture and also increased unemployment. On October 18th when prices had begun to fall, banks and investment firms panicked and bought large chunks of shares to stabilize the price. This led to a temporary resolve for a very short period of time. On Monday 24th, the free fall of share prices began, wiping out most banks and investment firms