Question

How did U.S. foreign economic policy affect Germany in the 1920s? Responses Intervention from U.S. troops to protect American businesses destabilized Germany's government. Intervention from U.S. troops to protect American businesses destabilized Germany's government. American planners assisted German farmers in establishing agricultural collectives. American planners assisted German farmers in establishing agricultural collectives. The outsourcing of American industrial jobs allowed Germany to start remilitarizing. The outsourcing of American industrial jobs allowed Germany to start remilitarizing. Loans from U.S. banks helped temporarily stabilize the tottering German economy. Loans from U.S. banks helped temporarily stabilize the tottering German economy.

Answer 1

In the 1920s, the U.S. assisted Germany financially through the Dawes Plan and various loans from U.S. banks, stabilizing the German economy temporarily. However, the interconnected debt structure and the onset of the Great Depression led to a severe international financial crisis.

Step-by-step explanation:

U.S. foreign economic policy in the 1920s had a significant role in affecting Germany's economy after World War I. The U.S. arranged the Dawes Plan in 1924, which modified Germany's reparation payments to be more manageable in the short term but to increase as their economy improved. Furthermore, numerous U.S. banks provided loans to help stabilize the inflationary German economy. These loans were critical for Germany to keep up with its reparation payments to Britain and France, which in turn were using the money to repay their debts to the United States. This arrangement created a complex web of debt and repayments that deeply interconnected the economies of the United States, Germany, and other European countries. Increased American lending played a part in temporarily stabilizing the German economy, but it also meant Germany was accumulating more debt.

When the Great Depression struck with the stock market crash in 1929, the strain on the global economy became unbearable, leading to widespread defaults on loans and an international financial crisis. This, coupled with subsequent protectionist trade policies like the Hawley-Smoot Tariff Act, exacerbated the economic downturn and international financial stress, leading to a faltering global trade system and worsening economic conditions in Germany and elsewhere.