3 History-Prosperity in the 1920's

melgallagher
Flashcards by melgallagher, updated more than 1 year ago
melgallagher
Created by melgallagher about 7 years ago
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Reasons why there was a 'boom' in the 20's. (low...) There was low inflation, low unemployment and low interest rates, which meant people had more money to spend.
2 (building) Cities were rebuilt with skyscrapers and road building programmes were created. This created jobs
3 (buying) There was a consumer boom (more people could afford goods like radios and fridges).
4 (adverts) Advertising encouraged more spending and was eventually expanded to radio and newspapers.
5 (luxury buying) Hire purchase (buying in installments) was introduced to allow people to be able to afford things like cars and encourage spending on luxury goods.
6 (loans) Cheap credit encouraged banks to lend people money on easy terms.
7 (Ford) Mass Production used the idea of increasing levels of production to gain ECONOMIES OF SCALE. Costs were "spread out" and average costs of production fell rapidly. Assembly lines were used by Henry T Ford first. It made production more efficient. This made it cheaper and more accessible. Price of a Ford fell from $950 in 1909 to $290 in 1928. As car industry grew, so did the industries supplying materials (glass, steel etc). Other industries began to use the same techniques. By 1930 there were 30 mil cars in the USA.
8 (stock market) In the 20's there was a great confidence in the US economy so people used cheap credit to get loans to buy shares, thinking they would make enough money to pay back to loan (buying shares 'on the margin') Many Americans were involved in speculation which was gambling on the price on shares.
9 (government-freedom) The stock market boom (bull market) was made easier by the republicans attitudes with "laissez faire" and "rugged individualism". These both meant that people and businesses should be left alone to sort out their own lives and finances. No intervention from the government.
Aspects of the boom The entertainment and leisure industry- Jazz music became a craze with clubs and musicians becoming popular with younger people. There was also a craze for cinema . By 1929, 110 mil went to the cinema each week. Hollywood was the centre of the film industry and created huge wealth+lots of jobs. New ideas and crazes came about such as dances like the Charleston and Tango. Fashions developed and women wore their hair bobbed and skirts became shorter (flappers) which were disapproved by older people.
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