The Economy of the 1920s

What does it mean to buy on credit?

• You can buy something for a discount

• You get the item for free

• You pay with cash right away

• You pay very little or no money up front, paying off the rest later (installment plan)

What did it mean to buy a stock on margin?

• People could purchase a stock for a very low down payment, with the promise of paying back the rest later

• You bought it at full price up front

• Buying only one stock at a time

• It meant looking at stocks, but not actually buying

Which of the following contributed to the economic boom of the 1920s?

• an increase in civil rights for women and minorities
• installment buying and buying stock on margin
• the mobilization of the economy for war
• increased government restrictions on big business

Why was buying stock on margin risky?

• It wasn't risky

• It could leave people in a lot of debt

• People couldn't get loans

• The government could take away your loans

Which of the following best describes an installment plan?

• Getting the item for free

• Making regular payments over time until the item is fully paid for

• Buying only used items

• Paying the full price of an item immediately

How did consumer credit impact purchasing habits in the 1920s?

• It allowed people to buy more goods than they could afford upfront

• It stopped people from buying stocks

• It led to a decrease in advertising

• It made people less likely to buy goods

What was a potential consequence of widespread consumerism during the 1920s?

• Decreased production of goods

• Rising levels of personal debt

• Greater economic stability

• Increased personal savings