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.

Question

Quizplus · Accepted Answer

European nations began defaulting on their debt to the United States in the late 1920s because they depended on reparations payments from Germany to pay those loans. However, American banks had stopped making loans to Germany, and as a result, Germany was unable to pay reparations to the European nations, which, in turn, could not repay their debts to the United States.

Why Did European Nations Begin to Default on Repaying Their