Problems in the economy 1920-1930

Question 1

Falling demand for consumer goods

Answer 1

The construction boom of the 1920s came to an end in 1928.

By 1929, most Americans who could afford a car already had one.

Question 2

Why was there a falling demand for consumer goods

• Unequal distribution of wealth

Answer 2

Almost 50% of American families had an income of less than $2,000, the minimum needed to survive.
This meant that they could not afford to buy the new consumer goods.

Question 3

The instability of ‘get-rich-quick’ schemes in the 1920s

Answer 3

The period saw large-scale speculations, notably during the Florida land boom and on the stock exchange

Question 4

The Florida land boom 1926

Answer 4

There were large-scale coastal developments.

People were investing their money in unseen developments,hoping to sell and make a quick profit.

Question 5

Problems with agriculture

List two points

Answer 5

1) After WW1, falling demand led to falling prices with wheat dropping form $2.5 to $1 a bushel.
2) Farmers were producing more food than America needed because technical advances meant that more crops could be produced on the save acreage.

Question 6

Problems with old industry

Answer 6

1) Coal mining and the textile industry were stagnating or in decline. Demand for coal fell in the 1920s as gas and electricity were more widely used and there was more foreign competition, especially cheap coal from Poland.