Question

Which of the following statements describes why American banks loaned money to Austria and Germany?

O Austria and Germany needed help purchasing weapons and supplies.
O Austria and Germany needed a way out of poverty.
O Austria and Germany had no financial reserves for making reparation payments.
O Austria and Germany needed help repairing war damages.

Answer 1

American banks loaned money to Austria and Germany because they had no financial reserves for making reparation payments.

Step-by-step explanation:

The correct statement is: Austria and Germany had no financial reserves for making reparation payments.

After World War I, Austria and Germany were responsible for making reparation payments to the victorious Allied Powers. However, both countries were severely damaged and did not have the financial resources to fulfill these obligations. American banks loaned them money to help them make these reparation payments.

By providing financial assistance, American banks aimed to stabilize the economies of Austria and Germany and prevent further economic instability in Europe.

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