How did easy consumer credit the u. s. economy during the early 1920s?

a. unemployment dropped because people had to find jobs to make their payments.

b. farmers sold more crops directly to consumers and so made more profits.

c. interest payments on personal debt allowed banks to make large investments.

d. people bought more goods and created high demand for new products.

The fourth alternative is correct (D).

During the 1920s, the US economy was experiencing an euphoria stemming from the good performance of the United States as the leading supplier of manufacturing and food to European countries during the First World War.

This euphoria led banks to increase lending to the public, to increase consumption, and to companies to increase output.

However, by the end of the decade, the situation became unsustainable. Overproduction did not find enough consumer market and US consumers got indebted. The NY Stock broke in 1929, being the beginning of the Great Depression that would come in the 1930s.

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