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GCSE Modern World HistoryAssignment 1: Boom, Bust and the Depression in the USA

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Introduction

GCSE Modern World History Assignment 1: Boom, Bust and the Depression in the USA (a) Explain the main factors on which the 1920s economic boom was based. America in the 1920s was a 'land of opportunity' and during this decade the USA became the most powerful economy in the world. There are many reasons why this was so, which will be explained in my essay. Firstly, the policies of the American government were in favour of pro business and lowered tax on company profits, thus encouraging people to run businesses which meant a boost for the economy. The American government also lowered income tax which encouraged more people to work; as a result they had more money so they could invest in shares, (which also meant more money coming in for businesses). ...read more.

Middle

In addition to these factors, another reason why the boom was so successful was because of the impact the First World War had on the US economy. USA had come out of the war well; America sold Europe many goods and took over European overseas markets and became the world leader in some areas (chemicals). There was still an increased demand for American goods; this led to the rapid growth of farming and industry and so the economy grew even faster when the war ended - the war hastened technological change which the US industry seized on and flourished because of it. Credit and hire purchase schemes made it easier for Americans to buy consumer goods. The people didn't need to have all the money to pay for goods on the spot; they could pay in instalments or take a hire purchase. ...read more.

Conclusion

Confidence. There was high confidence amongst Americans - to buy goods, invest in companies, to try out new ideas. Confidence created the right frame of mind in which developments could take place. To conclude, the economic boom of the 1920s was based on all of these factors mentioned. However, in my opinion, the three most important reasons were; confidence, technological changes, and mass production. Simply because if no-one had the prosperity feeling that they were doing so well and should expand, then perhaps America wouldn't have had a boom. In addition, mass production and technological changes are important reasons as well because if America did not advance in technology and invent new things because of this progression, then these consumer goods would not have been made and the USA's economy wouldn't have boomed. Thus, this technology teamed with mass production, businesses were able to produce more of these new goods quicker and cheaply, with less hassle. ...read more.

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