the Economic Boom 1920's


Causes of the Economic Boom 

  • Isolationist Policy- After the disastrous effects of WW1, the US was reluctant to get involved in Europe/s affairs and decided to keep to themselves.
  • Tariffs- putting higher taxes on foreign goods meant that local businesses could thrive because it encouraged Americans to buy their own goods. It protected them from foreign competition and circulated money into the economy, increasing the country's overall wealth.  eg) Fordney McCumber tariff made foreign goods 40% more expensive.
  • Mass production- Ford's assembly line meant products could be made cheaper, so more could be sold at a cheaper price. This made it more affordable so they had more sales, therefore, a bigger profit. This allowed them to increase wages for workers so they could also afford such products. This creates a cycle of prosperity. eg) Time taken to build cars reduced from 12 hours to 2.5 hours.
  • Advertising and mass marketing- This encouraged citizens to buy…


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