One cause of the Great Depression was buying everything by paying ?

Question

A. none of these 

B. Cash 

C. With credit 

D. Through an installment plan

Answer 1

Credit - they spent money they didn't have and then owed interest on the debt. 

Answer 2

When you buy with credit, then you are borrowing money.  Money you DON'T have.  When you have to pay back that money, it comes with interest, meaning you end up owing more than what you borrowed.  A lot of people paid for stuff with money they did not have.  They pay with credit because they don't have any money.  They could not pay back the money to the business that they bought from, causing the business to loses money themselves.

 

To sum this all up, people and businesses went broke.  There was no real flow of money in the economy.