American economy 1920s

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H/W          The American Economy in the 1920s       

I do not agree with the historian. I think the most important factor that helped America to boom in the 1920s was confidence. Definition of confidence: full trust; belief in the powers, trustworthiness, or reliability of a person or thing.

This was the most important factor because the confidence contributed in the money cycle. Firstly, confidence helped in making companies sell more for less. The growing American population started to grow more confident in the government and the industry. Payment could now be done in instalments and there were many schemes and hire purchase really exhibited some strong success. Rising wages and low takes meant that people could spend more on goods, encouraging the industries to grow. Therefore thousands of ordinary Americans could afford products being mass produced and as more and more products were being produced, the demand for raw materials such as coal and wood. The higher the demand for raw materials and natural resources, the higher the amount of factories being built. As the consumer demand became greater, not only were more consumer goods being produced e.g. - fridge, radio and car, more skilled workers were being employed on high wages. This easily led to more money being available to invest and also more taxes being paid to the government. Confidence was key for the right to prosperity.

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This was also the most important factor because it triggered all the other causes.

Firstly, confidence helped the good effects of World War 1. America joined the war in 1917 which was much later than Britain and France did and as a result, America soon became a leading exporter because Britain and France’s industry was disrupted. America lent Britain and France food and weapons to keep them running in the war, which gave companies opportunities for new goods. These good would be produced and advertised, and as more and more people were of aware of the consumer good, the consumer ...

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