Read the article and answer the questions: Explain what a stock market correction is. What did Economist Roger Babson predict in September 1929? pleawendepending on whether people buy or sell the stock. Investors make money when the market goesup. They lose money if it goes down.Stock prices crashed in October 1929. The stock market fell 25 percent in just two days. Investorsad lost 90 Ppanicked. They sold their stocks at lower and lower prices. By mid-November the stock markethad lost 50 percent. It finally hit bottom in 1932. By then it had lost 90 percent.eser ni dan19x160Stock Market Crash Led To The Great DepressionThe stock market crash badly harmed the U.S. economy. Many investors lost everything. The crashadded to other economic problems the country had. It was an economic disaster known as theGreat Depression.People sometimes say, "Hindsight is 20/20." They mean it is easy to see why something wentwrong after it happens. Looking back, there were signs of trouble before the crash.Gary Richardson is an economics professor. He has studied the 1929 crash and the GreatDepression. He says most investors knew the stock market could not keep rising. However, theydid not know how it would fall or how far."Sooner Or Later A Crash Is Coming"Roger Babson was an economist in the 1920s. He could see trouble for the stock market. He saidstock prices were way too high. In 1929, he spoke at a gathering of businessmen. He saidthat "sooner or later a crash is coming which will take in the leading stocks and cause a decline ..."What would happen then? Investors were likely to panic as they lost money. They would try to selltheir stocks while they were still worth something. More selling would drive down stock pricesfurther.Fisher, the economist, brushed off such fears. On October 15, 1929, he told people that stock priceswould stay high. He was very wrong. The stock market crash began two weeks later.The Federal Reserve is the central bank of the United States. It oversees other banks. It also helpsmanage the U.S. economy. It is often referred to as the Fed.The Fed Had Concerns Before Market CrashBefore the crash, the Fed had worries about the stock market. It believed the market was rising toofast. Part of the problem was how people were investing. Some investors were borrowing money tobuy stocks. Investment brokers made these loans. Investors might pay 10 percent of a stock priceto buy the stock, for example. They had to borrow the other 90 percent. This practice is known as"buying on margin."Buying on margin is risky. It lets investors borrow money to buy stock. If all goes well, the stockprice goes up. Then it is great. Investors can pay off the loan with the money they make. But whatif share prices go down? Then investors can lose a lot of money very quickly. The broker can tellthe investor to repay the loan immediately.Buying on margin contributed to the rising stock market. People were buying stocks with moneythey didn't really have. The Fed wanted to slow or stop this practice. They believed they could cooloff the stock market.

Question

Read the article and answer the questions: Explain what a stock market correction is. What did Economist Roger Babson predict in September 1929? pleawendepending on whether people buy or sell the stock. Investors make money when the market goesup. They lose money if it goes down.Stock prices crashed in October 1929. The stock market fell 25 percent in just two days. Investorsad lost 90 Ppanicked. They sold their stocks at lower and lower prices. By mid-November the stock markethad lost 50 percent. It finally hit bottom in 1932. By then it had lost 90 percent.eser ni dan19x160Stock Market Crash Led To The Great DepressionThe stock market crash badly harmed the U.S. economy. Many investors lost everything. The crashadded to other economic problems the country had. It was an economic disaster known as theGreat Depression.People sometimes say, &#34;Hindsight is 20/20.&#34; They mean it is easy to see why something wentwrong after it happens. Looking back, there were signs of trouble before the crash.Gary Richardson is an economics professor. He has studied the 1929 crash and the GreatDepression. He says most investors knew the stock market could not keep rising. However, theydid not know how it would fall or how far.&#34;Sooner Or Later A Crash Is Coming&#34;Roger Babson was an economist in the 1920s. He could see trouble for the stock market. He saidstock prices were way too high. In 1929, he spoke at a gathering of businessmen. He saidthat &#34;sooner or later a crash is coming which will take in the leading stocks and cause a decline ...&#34;What would happen then? Investors were likely to panic as they lost money. They would try to selltheir stocks while they were still worth something. More selling would drive down stock pricesfurther.Fisher, the economist, brushed off such fears. On October 15, 1929, he told people that stock priceswould stay high. He was very wrong. The stock market crash began two weeks later.The Federal Reserve is the central bank of the United States. It oversees other banks. It also helpsmanage the U.S. economy. It is often referred to as the Fed.The Fed Had Concerns Before Market CrashBefore the crash, the Fed had worries about the stock market. It believed the market was rising toofast. Part of the problem was how people were investing. Some investors were borrowing money tobuy stocks. Investment brokers made these loans. Investors might pay 10 percent of a stock priceto buy the stock, for example. They had to borrow the other 90 percent. This practice is known as&#34;buying on margin.&#34;Buying on margin is risky. It lets investors borrow money to buy stock. If all goes well, the stockprice goes up. Then it is great. Investors can pay off the loan with the money they make. But whatif share prices go down? Then investors can lose a lot of money very quickly. The broker can tellthe investor to repay the loan immediately.Buying on margin contributed to the rising stock market. People were buying stocks with moneythey didn't really have. The Fed wanted to slow or stop this practice. They believed they could cooloff the stock market.

Accepted Answer

In the complex landscape of financial markets, occasional downturns and turbulent episodes are…