Black Tuesday refers to the stock market crash that occurred on October 29, 1929, during the Great Depression. Two factors that contributed to this event were:
1. Speculation: Prior to Black Tuesday, there was excessive speculation in the stock market, where investors bought stocks with the hope of selling them quickly for a profit. This led to inflated stock prices that were not supported by the companies' actual value or earnings.
2. Overleveraging: Another factor was the practice of buying stocks on margin, which allowed investors to purchase stocks with borrowed money. When stock prices began to fall on Black Tuesday, investors who had bought on margin were forced to sell their stocks to meet margin calls, further driving down stock prices and causing panic selling.
These factors combined led to a rapid decline in stock prices, massive losses for investors, and ultimately the Black Tuesday crash, marking a significant event in economic history.
