Question

What effect did the use of credit have on economy in the 1920s?

Answer 1

It created a boom of the economy

Explanation:

The artificial issuing of money(because of the Federal Reserve system introduced before WWI) led to an artificially swollen economic growth and libertarians( the Austrian school of economics) criticize this intervention and attribute the Great Depression to it (see Boom and Bust theory)
https://www.investopedia.com/terms/b/boom-and-bust-cycle.asp
For instance, Rothbard wrote about the Great depression in which he clearly accuses central banking of being responsible of the crisis of the thirties.