Which event is identified as a catalyst that worsened the Depression in Canada?

• A. World War II
• B. Gold discovery in Klondike
• C. Formation of the United Nations
• D. Stock market crash

Answer: (D)

A collapse in financial markets acts as the catalyst because it starts a chain reaction that pulls the economy downward. When the stock market crashed in 1929, confidence collapsed, investment dried up, and consumer spending plummeted. Canada depended heavily on selling goods to the United States, so a sharp drop in American demand meant exports fell, prices for commodities dropped, and unemployment rose. Banks faced runs and credit tightened, making it hard for businesses and families to borrow and keep spending. That combination—loss of confidence, reduced credit, falling demand, and rising unemployment—deepened and prolonged the Depression in Canada. The other events aren’t what triggered the downturn: a gold rush happened long before and isn’t linked to the 1929 collapse, while the United Nations formation and World War II occurred after the Depression and, in fact, later helped revive economies.