How did the banking industry support the economic boom during the 1920s?
a. the banking industry restricted consumers' ability to make major purchases on credit.
b. the banking industry extended credit only to rich americans who they knew would pay them
back.
c. the banking industry adopted policies that made it more difficult to purchase a house, which
increased the value of existing houses.
d. the banking industry made it easier to borrow money, leading to an increased demand for cars
and other high-priced goods.

The correct response is Option D.  The banking industry made it easier to borrow money, leading to an increased demand for cars  and other high-priced goods.

Explanation:

There are a number of factors that led to the economic boom in the 1920s. There was a sharp increase in consumerism and the purchase of consumer goods, which also had a twofold impact. There was more demand for companies to make more products, and they needed more workers to be able to make the products and to meet demand, so this brought economic growth. It also became easier for people to borrow money or to purchase big-ticket items on credit, and this led to an overextension of credit because people were buying stocks with borrowed money and engaged in speculation buying, for example. This helps to explain the devastating stock market crash in 1929.

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-seth

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