The correct answer is A) investors bought more stocks on margin, and the stock market rose.
For most of the 1920s, the growth of credit affect the stock market in that investors bought more stocks on margin, and the stock market rose.
The excerpt explains what happened in the 1920s with the United States economy before the Great Depression. During the 1920s, US citizens had the money or the credit to spend on necessary and unnecessary things. Indeed, that is why the time is called "the Roaring 1920s." People abused credit to get things. Everything changed in October 1929 after the US stock market crash that caused the beginning of the Great Depression. Thousands of people lost their jobs, companies had to close and many banks went into bankruptcy.
