Final answer:
The collapse referred to by the student is associated with a Ponzi scheme, named after Charles Ponzi. These schemes crash when there are no more new investors to fund payouts to earlier investors, as happened frequently during the speculative climate of the 1920s, exemplified by the Florida land boom.
Step-by-step explanation:
The collapse of a pyramid scheme, which is named after Charles Ponzi, happens when no new investors are available to add funds. The Ponzi scheme is a fraudulent investment scam that promises high rates of return with little risk to investors. The scheme generates returns for older investors by acquiring new investors. This is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers.
During the prosperous 1920s, the United States experienced a surge in such speculative investments, fueled by a combination of low-interest rates and a robust expansion of the money supply. The Florida land boom is an example of this era's speculative mindset, which led to rampant investments in real estate. Ultimately, these schemes are doomed to collapse as they are slow-moving and cannot be sustained long-term due to their inherent limits to growth.