How far did the Republican Policies contribute to the US economic boom of the 1920s?

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Luis A. Sánchez

How far did the Republican Policies contribute to the economic boom of the 1920s?

After the First World War, the United States of America had an economic boom which led to an age of prosperity with no precedents in history. This boom was caused by many different and independent factors like the technological advance and the impact the First World War had on America.

Firstly, the policies of the Republican presidents were perhaps the most influential decisions when it came to this sudden economic rise. The Republicans started applying pro – business policies in order to promote good economy. Mostly what they did was lower taxes on income and company profits, this gave the wealthy more money to invest in American buildings and industry, hence the people had more money to spend on the extra goods that on were being produced. Additionally, they started putting taxes on imported goods which promoted the purchase of national made items, hence helping American producers. This measure also had a negative side as it had a high risk of deteriorating international trading between the United States and other European and South American countries. Moreover, they did not interfere with people’s businesses, neither had they put any restrictions on financial institutions and banks which gave them more freedom and money to spend and therefore have a greater profit.

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Another important factor was the confidence the Americans had after that time. The positive outcome from the war increased the confidence of the American population, in addition to the new Republican pro – business policies, resulted in them investing and buying new goods. This was one of the most vital factors that lead to the economic boom.

Moreover, due to the increase of consumption and production from the American people the banks were forced to extend line of credits which enabled lower class people to buy more products. As stores were willing to give people credits to pay for items ...

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