The 1920s is remembered as a time of strong economic growth, steady job creation, low inflation, rising productivity, and a surging stock market that resulted from a combination of rapid technological changes and sound central monetary policy. For the first time since the Great Depression, the economy underwent a "jobless recovery", where GDP growth and corporate earnings returned to normal levels while job creation lagged, demonstrating the importance of the financial and service sectors in the national economy, having surpassed the manufacturing sector. The keys to America's economic boom were technological progress and increased consumer demand.
The main reason how Economic Boom happened
America was in a fortunate position as the First World War ended. The war had not directly damaged American society and it had led to increased demand for American goods. This resulted in the rapid growth of industry and farming. The economy grew even faster when the war ended.
The main reason how Economic Boom happened
America was in a fortunate position as the First World War ended. The war had not directly damaged American society and it had led to increased demand for American goods. This resulted in the rapid growth of industry and farming. The economy grew even faster when the war ended.
Specific reasons how Economic Boom happened1. Isolationism: President Harding(1921-1923) and Coolidge(1923-1929) limited the trading of American Entrepreneurs so that these countries(which joined the world war 1) who wanted to buy products from America have to pay higher tax(and cause the economy to rapidly increase).
2. Technology: All that time, the American society have already got electrical, chemical and film industry skill.
3. Mass Production: The production of goods(especially automobile) in a large scale or number, since the demands for American goods are increasing, the factory and needs of workers it also help decrease the number of unemployment.
2. Technology: All that time, the American society have already got electrical, chemical and film industry skill.
3. Mass Production: The production of goods(especially automobile) in a large scale or number, since the demands for American goods are increasing, the factory and needs of workers it also help decrease the number of unemployment.
4. Shares: American companies started to create shares to expand the power of their company and people want to but the shares because they know that the company will give them a lot of profit.
5. Hire Purchase: allowed people to purchase new gadgets such as machines, refrigerator, vacuum cleaners and radios. borrowing increased the amount of money available to spend and therefore, the demand for goods.
Industrial Production doubled in the 1920s, between 1919-1920:
Industrial Production doubled in the 1920s, between 1919-1920:
- America's gross national product (GNP) grew from $78 billion to $103 billion.
- The number of households with a radio rose from 60,000 to 10 million.
- The number of people filing income tax returns for earnings of more than $1 million a year rose from 65 to 513.
- The number of airline passengers grew from less than 6000 in 1926, to approximately 173,000 in 1929.