(1a) Features of the economic boom (economic prosperity) Flashcards

1
Q

Features of economic prosperity:

What changes in industry and business techniques were there?

A
  1. Mass Production due to the assembly line method (more efficient).
  2. Management science
  3. Advertising.
  4. The automobile
    • Car ownership - 1920: 7.5 million. 1929: 27 million.
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2
Q

Features of economic prosperity:

Technological advances

A
  • Advances and time saving devices had an impact on leisure.
  • Products became more available due to Hire Purchase (pay in installments).
  • Number of electrical goods sold per year went from 1.4 million (1912) to 160 million (1929).
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3
Q

Features of economic prosperity:

Unemployment and Production

A
  • Unemployment never rose above 3.7%.

- 1922-1929: Production of industrial goods rose by 50%.

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4
Q

Government encouragement for business and laissez-faire economics:
Republican Government

A

Believed in…

  • Low taxes and limited government activity
  • Minimal interference in the economy
  • And the benefits of big business
    • Calvin Coolidge and his treasurer (Andrew Mellon) reduced taxes to favour the wealthy - 50% to 20% between 1921 and 1926.
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5
Q

Government encouragement for business and laissez-faire economics:
High Tariffs

A

Fordney McCumber Tariff, 1922:

  • Tax on imports to the USA.
  • Goods in the USA were cheaper but made it harder to sell abroad.
  • Limited foreign trade.
  • Some domestic producers were given a guaranteed market.
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6
Q

Government encouragement for business and laissez-faire economics:
Advantageous foreign markets

A
  • Govt encouraged business investment abroad.

- Especially raw materials - oil in Canada and Iraq, por ejemplo.

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7
Q

Government encouragement for business and laissez-faire economics:
Hire Purchase

A
  • Easily available credit helped fuel the boom.
  • This meant ordinary people could buy the latest technological and luxury goods - became more affordable.
  • 1929: Roughly $7 billion worth of goods were sold using credit.
    • 75% of cars
    • 50% of major household appliances.
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8
Q

Limitations of Economic Prosperity:

Uneven Distribution of wealth

A
  • Prosperity concentrated in the north and far west (mainly industrial north east).
  • 60% of families on less that $2,000 a year.
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9
Q

Limitations of Economic Prosperity:

Farmers

A
  • Huge increase in demand led to overproduction and a devastating fall in prices - $2.5 per bushel to $1 (wheat).
    • Reasons why: End of WW1; Prohibition; Production of synthetic fibres; Modern machinery; High foreign tariffs.
    • Republican policy: Agricultural Credits Act 1923 tried to encourage small farmers to form cooperatives - large farming businesses benefited from this (could afford to take out the loans).
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10
Q

Limitations of Economic Prosperity:

Black Americans

A
  • 85% were living in the south as sharecroppers (ie, very poor).
  • Many migrated north which led to the ghettoisation of urban areas (Harlem black population: 1914 - 50,000 1930 - 165,000.)
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11
Q

Limitations of Economic Prosperity:

Women

A
  • Only 150 dentists and less than 100 female accountants.
  • Only 2 women in the House of Representatives (435 delegates).
  • Tended to remain in low paid menial jobs - 700,000 women were domestic servants.
  • Women receiving a college education fell by 5% across the period.
    Less than 2% of judges or lawyers were women.
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