The Boom in Nineteen-Twenties

The Boom in Nineteen-Twenties

The economic boom in America was the sudden increases in economics.

The economics of America was America's money. Businesses grew because

they were selling more goods, and making more money. Because of

increased demand and increased production, companies had to employ

more people. This means that more money was available to spend. With

more money to spend, there were more increased demands for goods and

then the cycle starts again. This is the 'cycle of prosperity'.

There were also many new products in the 1920s, such as cars and

fridges. This created more jobs. I believe that the cause of the

economic boom was WW1.

The main cause of the boom was the First World War and American

Isolation. America also sold many of its goods and products such as

ammunitions and natural resources to Britain and France. America

gained money while the European countries were busy fighting. There

was a huge rise in production at this time. This also meant that a lot

of jobs were being produced as a result of this.

An important factor of the American boom in the 1920's was America's

natural resources. America was full of resources like oil and coal. If

these resources had to be imported to the USA, it would've cost more

money.

Another reason for the boom was the policy of the Republican Party.

When the Republicans came to power they introduced tariffs, this made

it expensive to buy foreign goods. The tariffs protected US businesses

from competition. The Republicans kept tariffs as low as possible

because of this everybody had more money and they would buy American

goods (because they were cheaper) or invest it in the American

companies. More Americans also invested money to buy shares in

companies as they had more money. With these policies came confidence.

Because people were confident they weren't worried about investing in

businesses because they were confident about getting it back.

Another contribution to the boom was the new technologies in America.

Americans loved new products such as the cars and fridges.