Why did the American Economy Boom in the 1920's?

Authors Avatar

Why did the American Economy

Boom in the 1920’s?

In the 1920’s America experienced an economic boom. This is a rapid increase in the wealth of a country, which meant that America became richer by a significant amount. The root of the economic boom was the cycle of prosperity, which can be set of when there is an increase in demand for goods produced by a country. This meant that America had to increase production of products and for this they would need to employ more workers. This decreases the number of unemployed people and means that people have more money to spend and this created more wealth for America. This essay will investigate the long-term and short-term causes of the boom.

The first part of this essay will discuss the long-term causes of the boom, which created, and environment in which the boom could take place. The first of these long-term causes was that America had a ‘natural advantage’. There were two points to America’s natural advantage, which were raw materials and regional diversity. America had a number of raw materials, which included oil coal and iron. America took advantage of these raw materials to build up its industries. The materials were also exported to other countries, which were not so fortunate as to have these raw materials. Regional diversity meant that America sold goods to other regions of the country. For this to be possible a country has to have a very large population and America had exactly this. This kick-started the economy in America making it possible to export goods later and companies produced as many goods as possible with all of them being sold as the demand was growing.

Join now!

The second long term cause of the American boom was ‘The American Dream’. America had a plentiful supply of labour during this time because the believed in the American dream. The American dream was that you could arrive in America barefoot and penniless and become a millionaire. In reality this was not at all true. The fact was that these immigrants just provided a very cheap source of labour for many businessmen and factory owners. Although the dream did not come true for the majority of people the government carried on promoting it as it strengthened there workforce which also ...

This is a preview of the whole essay