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The stock market crash of 1929 caused panic among investors. Many people had borrowed money to invest, which increased losses when prices suddenly fell.
Many banks had little regulation and low reserves. When people rushed to withdraw money, thousands of banks failed and people lost their savings.
Wealth was concentrated among the rich, while most workers earned low wages. This reduced consumer spending and weakened the economy.
Businesses produced more goods than people could afford. This led to unsold products, reduced production, and job losses.