What factors contributed to the onset of the Great Depression?

The onset of the Great Depression was primarily fueled by a combination of stock market speculation and bank failures, making this the correct choice. In the 1920s, an environment of rampant speculation led many investors to buy stocks on margin, meaning they borrowed money to purchase additional stocks. This created an unsustainable bubble. When the stock market crashed in October 1929, it wiped out billions of dollars in wealth and led to a crisis of confidence.

Simultaneously, many banks had invested heavily in the stock market or had loaned money to those who could not repay their debts. This resulted in widespread bank failures as people rushed to withdraw their savings, leading to a collapse of the banking system. The failure of financial institutions exacerbated the economic downturn, leading to further deflation, reduced consumer spending, and increased unemployment.

Other options do not capture the essential factors that led to the Great Depression. Rising interest rates and stock market recovery could imply conditions that are contrary to the economic climate of the time, as high-interest rates would typically restrict spending and investment, leading to economic decline. Increased wages and consumer spending (another option) were in fact not characteristic of the late 1920s as wealth was concentrated and consumer spending dwindled following the crash