Final answer:
State governments promoted economic growth primarily by underwriting bonds for infrastructure projects, which facilitated industrial expansion and economic development.
Step-by-step explanation:
State governments promoted economic growth by underwriting bonds for improvement projects. This approach helped to fund important infrastructure projects such as highways and bridges, vital for economic expansion. States like those that supported the Federal Highway Act of 1921 played a key role in paving the way for a connected and efficient transportation network. This, in turn, strongly benefited industrial sectors, particularly the automotive and oil industries, by stimulating demand for their products and facilitating the transport of goods and labor.
Additionally, measures like progressive taxation and regulation of industries, such as railroads, not only promoted fair competition but also provided more equitable working conditions. While protecting industries and encouraging their growth, these initiatives occasionally aligned with broader goals such as helping workers, advancing national defense, and even aiding in social reform movements.