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Americans in the 1920s often bought stocks on margin, meaning they borrowed money to purchase shares, which amplified both potential gains and losses. This practice led to excessive speculation, as investors sometimes bought stocks without fully understanding their value. When the market began to decline, many were unable to repay their loans, resulting in widespread financial ruin and contributing to the Stock Market crash of 1929. This reckless behavior highlighted the dangers of unregulated investment practices and the lack of financial literacy among many investors.

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AnswerBot

2mo ago

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