Reasons for the economic boom in the 1920s

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Laissez-Faire

Policy addopted by the Republican Presidents: Harding, Coolidge and Hoover. They didn't interfere in business and kept taxes low 

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Assembly Line

Also known as mass production invented by Henry Ford when he produced the Model T Ford. The cost of the car was kept low as all cars were the same colour and the same engine sign. By 1923 6 cars a minute were coming off the assembly line

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Credit

Allowed customers to pay for consumer goods like cars and fridges in installments, enabling more people to but more consumer goods. 6 out of every 10 Model T Fords were brought on credit 

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Knowledge

Inventions helped the development of new technology. Bakelite, a new plastic, was used to make radios and telephones. Electricity was developed, this gace factories a cheap and efficient power source.

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Position of the USA in the world

USA came out of WW1 well. They didn't join until 1917 and supplied Europe with many goods during the war. America was the world leader in industries like chemicals, rubber, wood and oil.

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Advertising

Companies spent huge amounts of money on advertising, this encouraged people to buy things they didn't even know they wanted.

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New Consumer Goods

Like cars, radios and fridges became popular in the 1920s, everybody wanted one. For every fridge in 1921 there were 167 by 1929. During the 20s households with a radio rose from 60,000 to 10 million.

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Tariffs

US government wanted to protect their own industries so they put high taxes called tariffs on imported goods. This meant that foreign goods were more expensive than American goods. So most Americans bought US goods. This created more jobs in factories.

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Shared Confidence

Confidence amongst Americans was sky high. People invested in companies by buying shares, confiendce is a vital ingredient in any economic boom.

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