BOOM, Like That!
The 1920s was a time in American history that economists label as an economic boom. An economic boom is part of a larger economic cycle that explains the functionings of any economy. An economic boom has many characteristics but can be defined by a simple equation of prosperity equals leisure time plus disposable income. The two decades of the 1920s and 1930s highlights a great textbook example of the entire economic cycle. The 1920s was the Boom. An economic boom is characterized by the following:
- Government policies of laissez-faire
- Conservative ideas
- Mass Production
- Mass Advertising
- New Power Sourcing
- New Ways To Buy
- Low Prices
- Prosperity
Cycle |
Description |
Boom |
rapid, large increase in money changing hands |
Growth |
long, extended increase in money changing hands |
Recession |
short, quick decrease in money changing hands |
Depression |
Phase #1 short, large decrease in money changing hands Phase #2 large, extended decrease in money changing hands |
Recovery |
money changing hands returns to the original, highest point |
Mass Production |
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Mass production is one of the characteristics of the Boom Cycle in an economy's life. In the 1920s, mass production was new to the world. The components of mass production are automation, interchangeable parts, and assembly lines. In the 1920s, Henry Ford mastered mass production to make the car accessible to almost every American. While Henry Ford did not invent the car, Ford was able to market the car for purchase. Mass production has an impact on the worker, increasing the overall amount of jobs in industry.
Mass Advertising: Examples |
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New Ways To Buy
In the 1920s, Americans had a lot of consumer goods available to them. There were so many goods available that companies needed to develop new ways for Americans to access the items. Installment plans allowed consumers to buy radios, cars, iceboxes, and more immediately. The early version of today's credit card systems allowed Americans to contribute to the boom.
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BOOM! A Bad Thing?
The boom in the economy was not for every American to enjoy. Farmers and immigrant workers were left behind during the economic boom. Farmers were experiencing a depression in areas of the nation. New technology that led many Americans to spend money resulted in farmers overproducing goods. The surplus led American farm prices to drop further, contributing to the farming depression. In the factories, automation created room for less skilled workers that could complete simple tasks in factories. Immigrants were hired to do the work but were treated unfairly and pushed to work long hours.
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Last modified Summer 2018 by M. Matyas
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