The Capitalist Boom of the 1920's (4) Flashcards
What were the foundations for this economic boom? (3)
- America’s raw materials
- Skilled labor force
- A growing market for manufactured goods
The Republican policy helped the economic boom of the 1920s, what was the policy? (4)
- As little government interference as possible
- High customs duties on imported goods
- Low taxes (so that people would have more money to buy goods and to encourage the welathy to invest more in industry)
- Weak Trade Unions
How did high customs duties help?
It would encourage people to buy locally.
How did low taxes help?
This ensured people would have more money to buy goods and to encourage the wealthy to invest more in industry.
How did weak trade unions help?
Workers would not have the power to demand higher wages.
What principles did Hoover believe in? (4)
- Decentralized government
- Ordered liberty
- Equal opportunity
- Freedom of the individual
During the 1920s, new technologies were developed to produce a range of _____ ____.
Consumer Goods
Which industry experienced the most growth?
The motor industry where Henry Ford introduced the moving assembly line.
The price of cars ____ and so more people could afford them. The most famous of all was the _____ or ‘Tin Lizzie’.
Dropped
Model T Ford
What effect did the motor industry have on employment?
It created millions of jobs in the industry itself and also in related industries such as iron, steel, rubber and glass manufacturing.
Motor vehicles led to the building of _____,____,____ and restaurants as people began to travel to different parts of the country which had not been easily accessible before.
highways
petrol stations
hotels
What are consumer goods?
Goods such as food, clothing, furniture, electrical devices.
What is credit?
An arrangement which allows people to buy goods and pay later.
Other inventions became available such as as….(5)
telephones washing machines vacuum cleaners refrigerators radios
Office work changed dramatically when electric ____ and telephone ____ were invented.
typewriters
switchboards
What made the invention of skyscrapers possible?
The invention of the passenger lift.
What influence did advertising have?
It became important in encouraging consumers to buy now and pay later instead of saving up until they could afford the new goods.
The practice of easy credit increased the ___ for goods, and so the industrial boom continued.
demand
The 1920s saw the start of mass ____ such as newspapers, radios and the first sound films.
media
Why was advertising important?
It appealed to what people wanted, or to their fears or insecurities. This often resulted in people buying whatever they wanted, instead of simply what they needed. Advertisers learned how to control public taste and influence consumer spending.
True or False
There was a decline in shares
False, shares prices continued to rise for much of the 1920s.
How did credit and shares become related?
The system of easy credit was soon extended to the stock market. Investors could buy shares by paying only 10% of the value of the share and owing the rest to banks, who were eager to lend money in the booming economic conditions.
What is the main way in which businesses get capital?
By encouraging people to invest their savings by buying a share of the business.
How does the stock market work?
Shares can be bought and sold at the stock exchange at prices which vary from day to day according to the value of the business. Shareholders benefit from higher share prices and profits are paid out in dividends. But they can also lose the value of their original investment if the company makes a loss.
