Causes of the boom Flashcards
What is the Fordney-McCumber Tariff?
Taxes on goods imported from other countries so American goods are cheaper
What were low taxes for?
So businesses and people have more money to spend
What was rugged individualism?
People were left to look after themselves
What are the republican policies?
Fordney McCumber Tariff, 1922
Low taxes
Rugged individualism
What were 5 causes of the economic boom?
Republican policies
Mass production
Credit and hire purchases
Advertising
Stocks and shares
What is mass production?
Began by Henry Ford 1914 The assembly line Produce goods quicker and cheaper More people could afford goods Demand increased Leading to more jobs
What was advertising?
Lots of new advertising techniques
Persuaded people to buy the new consumer goods
What was hire purchase and credit?
People bought goods on hire purchase
Pay a deposit and pay off in instalments
Borrow money from banks easily
With low interest rates
What did hire purchase and credit lead to?
More sales
Increasing demand in factories
More jobs
Higher wages
What was the stock market?
Companies sold shares on the stock market
Prices rose 300% due to high demand
Many shares sold on the margin
(people borrowed money from banks confident they could pay it back
Banks gave out a lot of money and did not get a lot back
What is the cycle of prosperity?
More workers/ higher wages
More spending
More sales
Increased production
