Why Did European Nations Begin to Default on Repaying Their

question 18

Multiple Choice

Why did European nations begin to default on repaying their debts to the United States in the late 1920s?

• A) They had begun massive rearmament programs.
• B) They were experiencing severe inflation.
• C) They were pouring massive sums into social welfare programs.
• D) They depended on reparations payments from Germany to pay their loans and, since American banks had stopped making loans to Germany, those reparations payments ceased.

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Definitions:

Pollution Abatement

The reduction or elimination of pollution to protect the environment, typically involving strategies and technologies to control emissions and contaminants.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain constant.

Marginal Benefit

The additional satisfaction or utility derived by consuming or producing one more unit of a good or service.

Public Good

An item or service made available at no cost to everyone in society, delivered by public institutions, private organizations, or individuals without aiming for financial gain.