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

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GCSE Modern World History

Assignment 1: Boom, Bust and the Depression in the USA

  1. 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). Therefore people had more to spend on brand new consumer goods. Another policy of the American government was to put tariffs on imports – this made imports more expensive so it led to people buying US goods instead of going abroad so this boosted the American economy. All these factors gave businesses the chance to expand without government restrictions.

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Secondly, the ever-increasing number of resources available in America was another reason on which the 1920s boom was based. Resources provided the materials growing industries required so without them new goods would not have been produced. So these resources (especially natural resources), were in demand. The resources benefited to new industries which produced new goods with them and so this led to mass production which followed on to mass marketing and advertising. Industries developed sophisticated techniques to persuade people to buy. These techniques had great effect so it made people spend more money, so businesses expanded, the economy boosted ...

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