Why Was There an Economic Boom in the 1920's?

Question 1

What factors contributed to the boom? (4)

Answer 1

1. World War 1
2. Consumerism
3. Growing industries and mass production
4. Republican Government Policies

Question 2

How did World War 1 contribute to the boom? (4)

Answer 2

1. Isolationism kept US out of war for first 2 years
   
   • allowed US to prosper
   • lots of new jobs and lots of people got rich
2. US loaned money to Britain and its allies
3. War had a far smaller impact on them
4. End of war: US was producer of the highest % of the world’s goods.

Question 3

How did consumerism contribute to the boom? (3)

Answer 3

1. Ppl began to buy ultra-modern electricity-powered gadgets i.e radios
   
   • Demand for goods created jobs
2. Effective advertising campaigns created a consumer society
3. 6 out 10 cars were bought with hire-purchase schemes

Question 4

How did growing industries and mass production contribute to the boom? (2)

Answer 4

1. Growth of motor industry made economy prosper
2. Industries began to use assembly lines to mass-produce items
   • Made goods cheaper

Question 5

How did Republican policies contribute to the boom? (2)

Answer 5

1. 1920s had 3 Republican presidents: Harding, Hoover and Coolidge
   - all enforced ‘laissez-faire” : allowed a capitalist society businesses to expand
2. 1922: Harding introduced protectionist policy
   • high tariff on foreign goods, encouraging Americans to buy only American goods