7
QuizMultiple Choice

Boom and Bust

Question 7 • [HSSUS] US History, Sem 1 (26-27)

For most of the 1920s, how did the growth of credit affect the stock market?

Answer
A
Investors bought more stocks on margin, and the stock market rose.
B
Investors bought more stocks with cash, and the stock market rose.
C
Investors took fewer risks on stocks, and the stock market declined.
D
Investors took more risks on stocks, and the stock market declined.

Explanation

As credit became more available during most of the 1920s, investors borrowed money to buy stocks, often purchasing them on margin. This increased demand helped stock prices rise. Choice A is correct: investors bought more stocks on margin, and the stock market rose.

AI-written and checked against the verified answer.

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