Reasons Behind the Economic Boom of 1920's

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Reasons Behind the Economic Boom of 1920's There was an economic boom in the 1920s for 5 main reasons. Firstly the growing strength of American Industry meant that the USA was a leading producer of many raw materials. This was partly due to the second main cause of the boom, which was World War 1. This had helped the American Industry to grow, as during World War 1 new markets had opened up to America. Also, after World War 1, America took over as a leading producer as many European industries had suffered greatly because of the war. Government policies meant that businesses could thrive without government interference. World War 1 led to new markets being opened to America. This resulted in America developing new industries and new industrial ideas. These new industries meant that Americans believed that America was the most powerful country in the world. Americans therefore bought consumer goods because it was a sign of America’s prosperity. This led to more and more things being bought which aided the economic boom. The growing strength of American industry was a big factor in the economic boom. In the twenties, industry took a very big step. It nearly doubled. It was partly due to the fact that the USA was rich in natural resources such as oil, coal and iron, which it could sell to European countries. America’s capacity to produce coal and iron was constantly growing. In the 1920s the USA was the leading producer of oil in the world. America’s agriculture was becoming the most effective and productive in the world. The industrial strength of America is probably the most important cause of the economic boom. It allowed ... ... middle of paper ... it led to America having money to invest in new industries. The First World War was the main reason for America’s industrial strength as many countries were paying America back money that they had loaned during the war, with interest. The First World War also meant that other countries were not strong enough to keep up with America’s industry. Republican policies were also contributory factors to America’s industrial strength, as one of the policies was to leave businesses alone. This meant that all industries thrived. New developments led to mass production, which allowed the average American to buy new items that were manufactured. Finally, this led to people believing that America was destined to be the strongest country in the world, encouraging them to buy more items and shares, which created the economic boom.
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