Question

question 7 (multiple choice worth 5 points) (4.02r mc) what was the short - term effect of the introduction of installment plans on the u.s. economy? wages declined as businesses had less money to pay workers. unemployment rose as fewer new products needed to be made. consumer goods sales fell as people paid off things they already had. the economy grew rapidly as consumers spent more and more money.

Explanation:

Installment plans allowed consumers to purchase goods on credit, meaning they could buy expensive items without paying the full amount upfront. This immediately increased consumer spending, as more people could afford products they previously could not. Higher consumer spending drove demand for goods, leading businesses to produce more, expand operations, and fuel rapid short-term economic growth. The other options are incorrect: installment plans increased business revenue (so wages did not decline), raised production needs (so unemployment did not rise), and boosted sales rather than causing them to fall.

Answer:

The economy grew rapidly as consumers spent more and more money.