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The Boom (7 Causes of the Boom (Ford and the motor industry (Mass…
The Boom
7 Causes of the Boom
Tariffs
Tariffs such as the Fordney McCumber Tariff Act were established to allow America to reap the benefits to the highest possible extent.
They were introduced on products imported from elsewhere which made them more expensive. Therefore, American products became affordable for the inancially struggling and were bought more, which pumped money into the US economy.
:warning: Tariffs were not always successful. As soon as other countries found out, they taxed American goods in retaliation.
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Republican Policy
- Republicans were in control from 1920-32 and their policies helped the boom. The first president in this period was called Warren Harding.
:red_cross: interference. Companies were left alone, and it was the firm belief of the Government that businessmen should be able to make their own fortune.:red_cross: high taxes. Taxes on members of the public in the USA were lowered, usually resulting in more money to spend around the home.
World War 1
America reaped the rewards of selling/lending American weapons to the British during World War 1. By the end of the war, Britain owed America £900 million.
America joined World War 1 in 1917. This was nowhere near enough time to affect its economic stability or to drain US resources. This was beneficial to America.
Shares
- Confidence from the people that the 'good times were here to say' encouraged them to invest in shares.
- This meant that a person would pay an investment in a business, and when it succeeded, they would receive a large payout as a beneficiary to that business.
- This led to the Wall Street (stock market central hub) success
Natural Resources
- The United States of America had an essential supply of natural resources such as timber, iron, coal, minerals, oil and land.
- This provided a sustainable financial fallback if anything were to go wrong, as well as providing material or land for the boom to occur - natural resources in American directly played a role in th economic benefit.
Hire purchase/credit
Hire purchase was a 'buy now, pay later' scheme.
Many people used this instead of paying upfront.
For example, 8 out of 10 radios were bought this way
(on credit.)
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