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Why was there a boom in the USA in the 1920s?

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Why was there a boom in the USA In the 1920s? In the 1920s, the USA was booming. Business grew, people became wealthy, new buildings were constructed and thousands of miles of roads were laid. Americans were able to buy a whole new range of new products like cars, radios and washing machines. Why did the US economy grow so fast at this time? Historians have suggested that a number of factors worked together to cause the boom. There is not a single most important factor to the great business boom of the 1920s. There is a certain cycle which must be followed for an successful boom to take place; firstly there is demand, this means that companies need to produce more, therefore there needs to be more workers, this leads to more money for the workers to spend which then goes back to there being more demand. However, this cycle does just not happen, some things help each part of the cycle making each part stronger. But this cycle needs something to get it started. This is usually, confidence among the people who have a good self-belief about their future. ...read more.


Demand was pushed more because of the introduction of mass marketing. It was very important for people to know about the products being produced, if they do not then the business will go bust. Many companies set about paying huge amounts to have their products advertised. This was the start of advertising for the USA and was hugely successful. It was also an introduction to the mail order catalogue. Because the USA is so big many people cannot make it to the shops making mail order catalogues an ideal thing. Improvements in media and also a greater demand for media products also helped other goods. Radios and cinema was used for advertising and was a great achievement. However, the trailers before films were no way near as successful as the advertising of what was in the film itself. Everyone wanted to become a film star or just look like one, leading to a huge increase in the sales of cosmetics. During this time films were full of people smoking and this lead to a big rise in the amount of cigarettes being sold. ...read more.


The government also added an increased amount to any foreign goods. This means that out of the things being purchased at the time a bigger percentage of those goods came from the USA, improving the economic status of the country. The main reason for this essay is to show that an economic boom is not wholly reliant on one factor but on a number of factors which are all linked. However, an economic boom does not last forever, people will not always need new things and the boom could come to a halt through over production. An economic boom is a group of events all linked together, if one collapses then so will the whole system. The way you know this is because if one thing goes wrong then the whole thing could go wrong. If there is over production then that means there would be less demand, meaning less things produced, meaning less workers, meaning less money, therefore leading to less demand. This means you would just head down on a downward spiral. The system could also go wrong because America was lending out so much money at the time, if they lost their records of the loans somehow it would cause major problems with thousands of banks going bankrupt. But that wouldn't happen, would it? By David Alison ...read more.

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