The Economic Boom Flashcards
How did republican policies cause the boom?
Fordney Mcumber Tariff 1922- tax on imported goods so people buy American goods
Lower taxes- people have more to spend
Rugged individualism- allowed individuals to thrive as each individual should be able to help themselves
Laissez faire- government didn’t interfere allowing businesses to thrive
How did mass production help cause the boom?
Mass production was started by Henry ford who was using the assembly line by 1914 and made it cheaper and faster to produce goods.
More people could afford things so demand went up and so did jobs
How long did it take to produce a car on the assembly line?
93 minutes
How did advertising cause the boom?
Billboards, magazine, radio and newspaper ads all persuaded people to buy goods to demand went up and so did jobs
How did credit and hire purchase cause the boom?
People could either borrow from banks or pay a deposit then pay back in instalments this meant that more people could afford the product so demand and jobs went up
Why did stocks and shares cause the boom?
Companies could sell a share of their company on the Wall Street Stock Market
lots of Americans bought shares to sell them for higher prices
Many shares were sold on the margin
What is buying/selling on the margin?
Borrowed money to buy shares confident that they could pay it back or put their house down as security
By 1929 how many people had invested in shares?
Over 20 million
What were the main causes of the boom?
Republican policies Mass production Advertising Credit and hire purchase Stocks and shares
How much did the share prices through the 1920’s?
300% so Americans saw it as a way to get rich quick
What is an economic boom?
An economic state of growth with rising profits and full employment
How many American had cars in 1919 v 1929?
9 million
26 million
How did ww1 help cause the boom?
The USA has made a lot of money through loans to Europe and by selling weapons and exporting food to European countries
How much did the assembly line reduce time and cost of a car by?
13 hours to 93 minutes
1908= $850 1925= $ 290
Wages doubled to $5 a day
