The Great Depression begins: How did credit lead to overwhelming debt for many Americans?

The Great Depression was caused, in part, by the federal government's monetary policies, stock market speculation and increasing consumer debt. ... This led to stock market speculation and use of credit. The Federal Reserve attempted to control these practices by constricting (limiting) the money supply.

Explanation:

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The two systems, installment buying and buying on credit, left millions of people in debt . When many lost their jobs, they could not pay back the debts they had incurred. Supply and demand helped bring about and also lengthen the Great Depression.

a free market economy requires less state intervention. concurrently, it often requires a degree of democratisation of its institutions which- to a certain extent- facilitates economic activity. at the same time, a free market economy appears to be reliant on democracy for its functioning.