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What effect did the use of credit have on the economy in the 1920s?

It made the economy stronger.
It made the economy weaker
It made parts of the economy stronger.
It solved the problem of overproduction.

2 Answers

2 votes
It made the economy weaker.
User SGalea
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The correct answer is B: It made the economy weaker.

During the roaring 1920s in the United States, there was a feeling of economic stability and growth that led the Americans to think that the word "debt" was out of their vocabulary. This is why banks were offering credits and loans with very low interest rates that were very easy to acquire for the average American consumer. This boosted the economy at first and consumerism was peaking, but as the Wall Street Crash came in 1929, the common American citizen found himself owing lots of money to the bank which he could not afford, therefore creating huge rates of poverty across the country that had never been seen before.

User Gligoran
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