What contributed to Germany's near bankruptcy by 1925?

The correct answer highlights the economic strain placed on Germany due to the considerable expenditure on welfare programs. After World War I, Germany faced immense financial burdens including reparations mandated by the Treaty of Versailles, loss of territory, and a weakened economy. As a result, by the mid-1920s, a significant portion of the national income was allocated to welfare to support the populace, which was grappling with unemployment, poverty, and societal instability. This extensive spending drained financial resources further, contributing to the near bankruptcy of the country.

In contrast, options suggesting that industrial production increased significantly do not align with the economic realities of post-war Germany, which was struggling to recover. The choice involving an increase in population would not directly correlate to bankruptcy as population growth alone does not equate to economic stability or fiscal responsibility. Lastly, while France's role in Germany's reparations and the financial aid context is notable, it was not the case that France provided substantial aid that would alleviate Germany's financial struggles: rather, the reparations demanded were a pivotal factor in crippling the economy. Thus, the focus on welfare spending as a chief contributor to financial instability accurately captures a critical aspect of the challenges faced by Germany during that period.