Final answer:
The U.S. adopted an isolationist policy during World War I to focus on domestic economic interests, aiming to avoid entering the conflict and maintain neutrality, influenced by trade and financial ties, but largely driven by a traditional approach to avoid international entanglements. Option 1 is correct.
Step-by-step explanation:
The United States adopted an isolationist policy during World War I primarily to focus on domestic economic interests. Isolationism had been a traditional approach of U.S. foreign policy aimed at avoiding entanglements in international military conflicts, especially prevalent after the costly and divisive Spanish-American and Philippine-American wars. The American public and government officials at the time were inclined to avoid involvement in another global conflict.
Although the U.S. traded with both the Allied and Central powers, the majority of American trade was with the Allies, influenced by British naval superiority, a blockade against Germany, and financial connections. American banks extended more credit to the Allies than to the Central powers, with approximately $2 billion extended to the Allies compared to $27 million to the Central powers by spring 1917. Despite economic entanglements, the U.S. favored a policy of strict neutrality to avoid direct involvement in the war which could have led America into another costly conflict.
Post-World War I and leading into the Second World War, isolationist sentiment returned with many Americans and politicians wary of European affairs and commitments that could limit America's independence in decisions. The focus was largely internal, with the United States dealing with the economic challenges of the Great Depression and steering clear of the emerging totalitarian regimes in Europe and Asia until it became clear that involvement in World War II was in the nation's interest.