The Economic Boom 1920s Flashcards
1
Q
How did WW1 support the boom?
A
- the USA stayed out of at first, following a policy of isolationism. This allowed the USA to prosper financially; American banks loaned money to Britain and its allies to buy food, weapons and equipment, mainly from the USA. This created many jobs for Americans
- by the end of the war the USA led the world in the production of medicines, dyes and other materials, and many basic goods
2
Q
How did republican policies support the boom?
A
- to help American businesses, the Republic government introduced several new policies
- tariff put high taxes on imports, making foreign goods more expensive. As a result, Americans bought more US-made goods, creating more jobs for Americans
- the Republican government cut taxes paid by rich people. As a result, the rich invested more money to start more businesses, creating more jobs
- taxes were low in general, so people had more money to spend
- the Republicans’ ‘laissez-faire’ approach meant that businesses were left alone to get on with creating wealth
3
Q
How did a consumer society support the boom?
A
- the number of US homes with electricity grew rapidly in the 1920s, from 15% in 1916 to nearly 70% in 1927
- this meant that people could buy ultra-modern electric-powered ‘gadgets’ such as vacuum cleaners, radios, telephones and refrigerators
- huge demands for these goods created jobs in the factories that made them
- sales of consumer goods grew hugely
- America made nearly half of all the world’s consumer goods
- Cars - 1919: 9 million, 1929: 26 million
- Radios - 1919: 60,000, 1929: 10 million
4
Q
How did mass production support the boom?
A
- the growth of the motor industry boosted the US economy. Car-making used large quantities of US steel, leather, rubber and glass. More jobs were created in these industries as more cars were made
- many American businesses used the mass production methods developed in the motor industry. As companies got quicker at manufacturing, their goods became cheaper
5
Q
How did new ways to buy or sell support the boom?
A
- colourful billboards, newspapers and magazines urged people to buy the latest gadgets
- catalogues made buying easy, and the goods could be delivered to your door
- ‘buy now, pay later’ schemes (‘hire purchase plans’) meant buyers could pay for goods in small instalments over a fixed period. Six out of ten cars were bought this way
