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In the 1920s, particularly during the latter part of the decade, speculative investments and excessive borrowing contributed to economic instability. Many investors engaged in margin trading, buying stocks with borrowed money, which inflated stock prices beyond their true value. When the market began to decline, this led to a massive sell-off and, ultimately, the Stock Market crash of 1929, significantly weakening the economy and paving the way for the Great Depression. Additionally, overproduction in various industries created imbalances, leading to falling prices and unemployment.

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2w ago

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