Cause of the BOOM Flashcards
CAUSES OF BOOM
FACTOR: NEW TECHNOLOGY AND INDUSTRY
FACTOR: NEW TECHNOLOGY AND INDUSTRY
Evidence
- Huge growth in advertising/ consumer goods (fridge, radio, vacuum cleaner, washing machine) and construction industry.
-Biggest boom in car industry = Henry Ford created assembly line for mass production of Model T car.
- Boom in industries connected to cars, such as glass, leather, steel, rubber, road construction, petrol stations, motels.
CAUSES OF BOOM
FACTOR: NEW TECHNOLOGY AND INDUSTRY
FACTOR: NEW TECHNOLOGY AND INDUSTRY
Explanation
- New industries created big profits and more jobs.
-Fuelled the cycle of prosperity. (More jobs = more demand for goods = more profits for businesses = more profits/ businesses expanding.)
CAUSES OF BOOM
FACTOR: CHANGING ATTITUDES
FACTOR: CHANGING ATTITUDES
Evidence
-Shift away from saving towards spending.
-Move towards consumer driven society = people willing to borrow money to have goods they want asap.
Explanation
- Increased demand for goods. Helped fuel cycle of prosperity.
CAUSES OF BOOM
FACTOR: CREDIT & SHARES
FACTOR: CREDIT & SHARES
Evidence
- Hire purchase = people could buy consumer good and pay for it in monthly instalments.
-Buying on margin = people could take loans from bank to buy shares, hoping that price would rise, they could sell quickly = quick profit, pay back bank.
Explanation
-More people could afford consumer goods = increased demand = profits = more wages/ jobs (fuelled cycle of prosperity)
CAUSES OF BOOM
FACTOR: INDUSTRIAL STRENGTH
FACTOR: INDUSTRIAL STRENGTH
Evidence
-USA had a lot of natural resources/raw materials
-USA = a leader of many industries during WW1 – exporting chemical/ explosives/ agriculture
Explanation
- Created a strong & successful foundation for economy.
- Lots of profits made during WW1 = economy strong by 1920.
CAUSES OF BOOM
FACTOR: REPUBLICAN POLICIES
FACTOR: REPUBLICAN POLICIES
Evidence
– Laissez Faire = Govt not interfering in business. Appointed captains of industry to lead business/ economy.
-Rugged individualism = people having responsibility for themselves.
- Low taxation
- Tariffs on foreign imported goods
(Eg. Fordney McCumber Tariff)
CAUSES OF BOOM
FACTOR: REPUBLICAN POLICIES
FACTOR: REPUBLICAN POLICIES
Explanation
- Allowed businesses freedom to plan for growth and expand – very few govt rules/ restrictions.
- Allowed ordinary people to take out big loans if they chose
- Less tax meant more disposable income for many Americans.
- American goods were cheaper to buy than foreign = increased demand.
