Answer :
Final answer:
Consumer spending in the 1920s increased due to efficient mass production methods, higher wages, a strong stock market, and persuasive advertising. However, this led to a rise in personal debt, which can negatively impact a nation's economy by slowing growth and destabilizing financial institutions.
Explanation:
Several factors contributed to increased consumer spending in the 1920s. Firstly, the introduction of more efficient methods of mass production, notably the assembly line, resulted in a decrease in prices for goods like cars and appliances. Secondly, increased wages and a booming stock market gave the public more disposable income to spend. Finally, the advent of advertising persuaded people to buy more nonessential goods and services.
However, along with this increase in consumer spending came a rise in personal debt. When too many people are in debt, it can negatively impact a nation's economy. For instance, if people are using most of their income to pay off debts, they aren't spending as much on goods and services, which can slow economic growth. Furthermore, high levels of personal debt can lead to increased defaults and bankruptcies, which can destabilize financial institutions and lead to economic recessions or depressions.
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