Why was there an economic boom?
- Created by: Heather
- Created on: 08-03-14 16:53
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- Why was there an economic boom?
- World War One
- They lent money to the allies, sold arms and munitions and food,
- It was a one-way trade so boosted the economy,
- While the European powers were fighting, America could take over their trade around the world as well as European controlled exports
- Before the war, Germany had the biggest chemical industry but at the end, American had taken this over,
- America supplied chemical products such as fertilisers and dyes,
- America was not in the war long enough for it to drain its resources like Europe,
- Republican Policies,
- 'Laissez-faire'- This is where the Gov. leaves the economy and business to regulate itself so prosperity came,
- Tariffs protected American industry from foreign competition and allowed them to grow rapidly
- Low taxation which gives the people more money to spend on American goods so boosts the economy,
- Trusts- Mega companies which are controlled by one person or one family were encouraged as they believed trusts would run the economy well,
- Mass Production and the motor industry
- Henry Ford created the production line in 1914 for his model T-ford car,
- Cars had taken 14 hours to make but now only took 93 minutes
- By 1927, one car was produced every 10 seconds,
- In 1900, 4,000 cars were made but in 1920, over 1 million cars were made,
- Cars cost 3 weeks wages so were affordable. In 1911, a car cost $850 and in 1920 cost $295
- 4 million people were employed in the Motor Industry,
- There was one car for every 5 people in American
- Industries related to the car industry boomed like glass, steel, rubber and oil,
- Other industries that did well were telephones, radios, canned food, refrigerators, ovens, vacuum cleaners, artificial textiles industry etc,
- Henry Ford created the production line in 1914 for his model T-ford car,
- Hire Purchase and advertising,
- Hire purchasing- When you put in a deposit to buy a product which you cannot afford to buy outright,
- You pay a fixed amount each month until the product is paid for- known as paying in instalments,
- This boosted the economy as more people could afford to buy products so more people did buy so increased production and jobs,
- Advertising boomed- On billboards, in mail order, catalogue, cinema, radio which encourages people to spend money so boosts economy,
- They were urged to live the American dream and to 'keep up with the Joanses' so keep up the competition with neighbours,
- Hire purchasing- When you put in a deposit to buy a product which you cannot afford to buy outright,
- World War One
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