Causes Of The Economic Boom

Question 1

What was the Economic Boom?

Answer 1

A period of prosperity in the 1920s when America saw an increase in production, sales and wages

Question 2

What were the 4 main causes of the economic boom?

Answer 2

Industrial strength, WW1, Republican policies, Market for consumer goods and stocks and shares

Question 3

How was industrial strength a cause of the economic boom? (3 points)

Answer 3

• more steal, coal, textile and oil industries
• development of motor cars, telephones ams electrical appliances
• USA had lots of natural resources

Question 4

How was World War One a cause of the economic boom? (4 points)

Answer 4

• America sold weapons and food
• USA took over Germany’s supplies and production
• USA joined the war late, meaning they weren’t drained of resources
• USA took over European trade

Question 5

How were republican policies a cause of the economic boom? (3 points)

Answer 5

• Laissez faire allowed businesses to do their own thing and not be controlled by the government
• the government taxed as little as possible
• tariffs made it expensive to import goods from anywhere but America

Question 6

How did market for consumer goods and stocks and shares cause the economic boom? (3 points)

Answer 6

• advertisement on the radio
• mail orders made it easier to buy goods
• hire purchase allows people to pay for goods in instalments over time

Question 7

Describe the cycle of prosperity

Answer 7

More money available to spend on consumer goods—> increased demand for consumer goods—> increased production—> increased employment