The American People & The Boom Flashcards
What was The Boom?
an increased consumer demand for American goods and rapid industrial growth after First World War
What is the cycle of prosperity?
mass production led to
jobs led to
consumer spending led to
stock market prosperity
What caused the Boom?
world war one & resources republican policies stock market consumer industries & advertising credit & hire purchase mass production
How was World War One and resources important?
- essential supply of natural resources (timer, coal, iron, minerals, oil, land)
- took advantage of industrial strength
- exploited raw materials to produce chemicals, gas & machinery
- strong position after war meant plenty of money to invest
How were republican policies important?
- in control throughout 1920-1932
- laissez faire
- tarifs
- taxes
What was laissez faire?
stopped the government from intervening with peoples lives, gave the economy freedom to develop itself
What were tarifs?
put taxes on foreign good which persuaded people to buy American goods
What were taxes?
they were reduced so business people could invest in factories and more money to spend
What was the stock market?
- where firms sold shares on the Stock Exchange
- raised money for expansion
- prosperity continued to grow
- prices increased = more money for companies
What were consumer industries and advertising?
- mass produced products sold on a vast and cheaper scale
- industries took advantage of scheme and used marketing techniques
- mass nationwide advertising used for the first time to support war effort
- learned skills from wartime propaganda to set up agencies
What were the marketing techniques?
radio newspapers cinemas propaganda travelling salesmen
What was credit and hire purchase?
- could buy something by paying on a monthly basis
- money borrowed easily
- majority could afford expensive goods
- massive consumer spending
What were the schemes for credit and hire purchase?
- buy now, pay later
- 8/10 radios and 6/10 cars bought on credit
How was mass production important?
- Henry Ford developed the production line
- 1 car made every 10 seconds
- 1 car to 5 people
What was the production line?
- same amount of goods on a large scale and quicker
- prices of goods fell, employing more workers
