Judging from the events of the late 1920s and early 1930s, how important do you think public confidence is to the health of the economy? Think about:
What happened when overconfidence in the stock market led people to speculate and buy on margin.
How confidence affects consumer borrowing.

In the late 1920s and early 1920s, the stock market and United States economy crashed. America lost 33 billion dollars. At this point the confidence in the U.S. economy had dropped. The confidence of the public should not have been that high in the economy. The over confidence had led the consumer to buy on a margin, or credit. The confidence in the stock market led people to buy more stock.
The confidence in the stock market also influenced how much money was borrowed. Since they thought that the economy would not crash, they were not concerned about having to pay back their debt.