Economic Boom (copy)

What is an economic boom?

What is an economic boom?

An economic boom is a situation where businesses are making profits, employment is high, and people are happy to spend their money

What were the causes of the 1920s boom?

Republican policies, natural resources, New technology, WW1, New industrial methods, Credit/Hire purchase, Mass marketing, Confidence

How did natural resources contribute to a booming economy?

Natural resources provided the materials the growing industries required. The availability of these materials helped American businesses save money because costly imports weren't necessary

How did WW1 contribute to a booming economy?

During the war America became rich because there was a one way trade with Europe supplying weapons, food, and industrial resources to both sides in the war

How did new technology contribute to a booming economy?

Once the war was over, the modern technology (new methods of delivering goods faster and cheaper to countries) enabled new industries to grow, helped to modernise old industries, making them run more efficiently which increased profits.

How did mass production contribute to a booming economy?

Henry Ford created this method and was copied by other industries/businesses and enabled them to increase their profits as goods were made more quickly, cheaply which increased sales as more people could afford to buy goods

How did mass marketing contribute to the boom?

Mass marketing helped to sell vast numbers of goods by involving advertising the products using billboards, radio jingles, cinema ads, magazine articles, and sandwich boards and therefore increase sales and profits

How did credit/hire purchase contribute to the boom?

Credit was a system that made it easier for customers to afford goods because people could buy now and pay later which guaranteed increased sales and companies could get interest on the loan

How did confidence contribute to the boom?

Statistics showed that USA was the world leader in tarde, wagers were up, unemployment was down which made the American people more inclined to spend rather than save their money

How did the Republican Government Policies contribute to the boom?

The Republican policies tended to leave businesses alone (laissez-faire) so they had the chance to expand without government restrictions, low taxes were also introduced which allowed Americans to have more expendable income, tariffs on goods imported from overseas increased as it encouraged Americans to purchase the cheaper domestic goods

Which groups prospered from the boom?

Owners/Investors in construction/electrical goods/natural resource companies, workers at Henry Ford Motor car company, people working in hospitality/entertainment industry

Why did owners/investors in construction/electrical goods companies benefit?

These industries were in high demand therefore profits increased

Why did owners/investors in natural resource industries benefit?

These raw materials (like steel, glass, timber) were needed to make many of the new goods so production and profit increased

Why did the workers in overall high demand industries benefit?

Although they didn't have increased wages, they had job security

Why did the workers at Henry Ford Motor Car Company benefit?

They were paid double the usual hourly rate to reflect the repetitive tasks of their work

Why did people working in the hospitality and entertainment industry benefit?

As Americans had more free time and more money, many Americans visited pubs, clubs, hotels, restaurants, theatres and cinemas more often

Which groups didn't benefit from the boom?

Farming industry, older industries, Black Americans, Native Americans, Immigrants, people living in Chicago

42% of all families in America...

lived below the poverty line

Why didn't the farming industry benefit from the boom?

Total farming income fell from $22 billion in 1919 to $13 billion in 1928, there were 5 times as many farm bankruptcies, farmers were earning only 1/3 of the average wage of other workers

How did European tariffs affect farmers?

European tariffs made food more expensive to other countries so farmers with extra food couldn't sell abroad

How did overproduction affect farmers?

Due to new machinery vast numbers of food were being produced however the number of people wanting to buy their products was running out so in 1921 far prices fell by 50%

Why Was Coal industry declining?

Greater use of electricty and oil for heating meant that demand for coal fell and mines were closed down

Why was the copper and tin industry declining?

These materials were replaced by cheaper materials such as plastic

Why didn't the Black population benefit from the boom?

There was a lot of competition for jobs in the South as it was more likely that a white American would gain a job so many were out of work or had very low wages, those that moved to find employment were discriminated against, discriminated by the KKK

Why didn't Native Americans benefit from the boom?

Native Americans were still living on reservations that was so poor that is was nearly impossible to feed a family, not to mention also discrimination against this group

Why didn't immigrants benefit from the boom?

Immigrants were given the worst jobs on the lowest pay due to discrimination, especially Mexicans and South-eastern Europeans

Why didn't people living in Chicago benefit from the boom?

Many jobs were only temporary, many workers were immigrants which created tension, only 3% owned a car, there were many poor white people as well as black Americans, poor couldn't afford to pay $1 for the cinema or buy a radio