Why did the American Economy

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Harry Kanda        History        03/05/07

Why did the American Economy “Boom” in 1923-29?

The US economy experienced a boom from 1923 for a multitude of reasons, none of these reasons are solely responsible for the “boom”, however as I hope to explain they did influence the economy in order to maintain the boom. The plethora of interconnecting factors include natural resource, the impact of the World War One (1914-1918), Republican polices, new technologies coupled with methods of finance and advertising. The most poignant aspect of the boom in 1923-29 was that it was a sustained boom for 6 years compared to the natural boom and bust cycle experienced every year.

The United States’ wealth of natural resources meant that it was a self-sustaining economy, in other words the US economy can produce everything necessary for a viable economy without having to pay for imported goods or resources. The increasing demands for oil, coal, and iron by industries such as in the car industry due mainly to the Model T Ford as the creation of the assembly line meant a multitude of cars were made in a short space of time. Furthermore, in the early 1920s agriculture was still an important source of income for the nations economy as it was still trading with war stricken countries and the new countries created after the First World War. The wealth of natural resources meant that all raw materials were made within America. Put simply those markets, which made raw materials, were in constant and increase of demand, so jobs were kept and even increased in some of these areas, these markets meant that a constant source of income for the nations economy was always needed.

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The First World War helped tremendously throughout 1923-29 as businesses prospered by securing new foreign markets, during the war the US leant an approximate of $10 billion to the European Allies, and by the 1920s a further $1billion interest had accumulated. The increase and the shear scale of US markets meant that there was another continuous source of income for the US economy. Britain and France were almost dependant on American help following the war, but this meant that their markets almost dissolved and so America seized the opportunity and took control of their markets as well. America were ...

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