USA - 4. Economic Boom

List the 8 causes of the Economic Boom

Natural Resources + Immigration, Impact of WW1, Electrification, Mass Production, Advertising and Consumerism, Finance + Hire Purchase, Republican Government Policies, Confidence

How did Natural Resources and Immigration cause the Economic Boom?

America had a plentiful supply of raw materials (oil, coal, wood, iron etc.) which provided a foundation for growth before WW1. They had a supply of cheap labour due to high immigration rates so demand for jobs could be filled to support growing industries and services.

How was WW1 a cause the Economic Boom?

USA did not join the war until 1917. Initially they provided food, raw materials and munitions to other countries. They made profits from this which could be used to invest in the economy and services/infrastructure. WW1 stimulated technology advances and mechanisation.

List 3 key words for the WW1 cause of the Economic Boom

Technology advances, Mechanisation, Profits

Explain the cause of Electrification in causing the Economic Boom

Electrical power led to the creation and use of electrical goods and these innovations grew the market and demand increased. Provided cheaper, reliable and efficient power for factories + industries so they gained more profits.

Give 2 examples of a product designed due to Electrification

New 'beats-as-it-sweeps-as-it-cleans vacuum by Hoover in 1926 and Monitor-Top refrigerator in 1927 by General Electric Company

Give a statistic about electricity in homes due to Electrification

By 1927 63% of homes had electricity

Explain how Mass Production caused the Economic Boom

The assembly line known as the Magic Belt sped up production and standardised products made prices of goods cheaper so there was more demand. It also grew other industries due to transport and tourism e.g hotels, gas stations, oil industries etc.

Give an example of a car created and the inventor

Henry Ford invented the Model T Car

Give a statistic on mass production in the car industry

In 1913 the Ford Factory in Detroit produced a car every 3 minutes but by 1920 it was every 10 seconds

Give a statistic in the number of cars in American due to mass production

From 1920-1929 the number of cars rose from 7.5 million to 27 million

Give a statistic about the price changes in the Model T car due to mass production

In 1909 it cost $1200 but by 1928 it was only $295

Explain how Advertising and Consumerism caused the Economic Boom

It encouraged purchases and increased awareness of new products especially due to electrification which increased demand. The designers studied psychology of consumers to increase demand. The average wage also increased allowing consumers to have more disposable income.

Give a statistic about clothing sales due to advertising

Sales went up 427% in the 1920's

Give a statistic about the average wage increase in the 1920's

It increased 8% from 1923-1929

What was hire purchase?

Goods were allowed to be paid for in instalments

Why did department stores grow?

Demand for consumer goods especially electrical appliances increased and they allowed customers to choose goods themselves which sped up shopping and queues to accommodate for the demand.

Give facts about the first supermarket in 1916

It was in Tennessee and was called Piggly Wiggly. It was opened by Clarence Saunders in 1916.

Why was instalments/hire purchase a cause of the Economic Boom?

Customers could buy goods more easily with disposable income even if they didn't have enough money immediately and it made goods accessible to lower classes. Therefore demand increased growing other businesses too.

What was the Laissez-Faire policy?

Belief governments should leave businesses to take their own course without interfering in the hope to create high profits, more jobs and good wages.

What was 'Rugged Individualism'?

A belief people achieved success by their own hard work

What was 'Protectionsim'?

Isolationism to put tariffs on imported goods to foreign countries to make profits and keep the demand for American-based products.

Give the name of the Tariff which raised import duties to the highest level and when was it?

Fordney-McCumber Tariff in 1922

Which government was in control during the Economic Boom and what were their beliefs?

Republican Government focused on building the economy using Laissez-Faire policy and Protectionism and Rugged Individualism

Explain the Cycle of Prosperity in the car industry

Mass production increased production rates for demand. Standardised parts are need to industries in steel, glass and rubber produce and sell more, growing their businesses. This provides jobs giving people income to spend on consumer goods. Related industries also grow in transport and tourism e.g gas stations and hotels.