The Roaring 20s - Economy

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The Roaring 20s - Economy

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The Roaring 20s

The Best of Times

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During the 1920s, new forms of transportation allowed for easier and more efficient transportation, along with many other benefits. A very important person involved with automobiles is Henry Ford. Ford introduced a new way to manufacture automobiles, the assembly line. The assembly line was revolutionary because of how much easier, faster, and more efficient it became to manufacture goods. The average time it took to manufacture an automobile was cut from 12.5 hours to just 1.5 hours, and these automobiles costed only about $290, less than three months wages for the average American worker at the time, making them very affordable. Workers for Ford also benefitted, having a minimum wage of $5, which was almost twice the average at the time, and only an eight hour workday. This allowed for the workers at the factory to actually buy the automobiles they worked on for a very cheap price.

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New Transportation:

New Ways to Purchase Goods:

Part of what made the 1920s so extravigant was how consumers could buy products. During the 1920s, most manufacturers allowed consumers use installment buying or buying on credit to buy products "on time". These methods of purchase allowed for the customer to buy an item without paying, and then gradually pay off the price over time. Most people used this method of purchasing, to the point where about 60% of furniture and 75% of all radios were bought on credit. This caused a shift in how people felt about purchasing goods. Instead of saving up the money to buy something, they could borrow the money from a bank and pay it back later. Many people used installment buying to purchase the newest furniture, clothes, or technology whenever they wanted, meaning most people led a glamourous lifestyle.

Real GNP Per Capita

High Quality Of Life

In the 1920s, there was pressure on people to keep up with the style of living, the newest fashions, and the latest developments in technology in a society. This pressure led to most people buying many new, expensive things. Combined with installment buying or buying on credit, this constant purchasing led to a very extravagant lifestyle, where many people would take out huge loans in order to get a new car or a fancy new piece of furniture. Such people would also often throw parties, which is part of why the time is called the 'Roaring 20s'. These parties that were held usually had large amounts of people, live music, dancing, and drinks, and were loud and very energetic. People had the time to go to such parties because of new technology which aided in work or made things more convenient, like telephones, vacuum cleaners, and refrigerators.

In the 1920s, part of how both citizens and the economy prospered was due to stocks. Before the 1920s, most people did not want to invest in stocks because they thought it would not be prosperous. But once Americans heard the success stories of investors in the stock market, they too wanted to invest in stocks. This led to over 1.5 million people in the 1920s investing money in stocks and hoping they would become rich, and they did. By the time the stock market peaked in 1929, there were about 25,000-35,000 millionares in the US. For most investors, it seemed like they could make a fortune overnight, thus allowing them to buy many expensive luxury items and throw expensive parties. The mass purchase of stocks also led to a huge boom in the economy for the majority of th 1920s.

Stocks

The Republican Era

The 1920s were a time of economic prosper. It became that way due to how the government treated big business and the economy. During the 1920s, the government was primarily Republican, and supported big business. The government also became laissez faire, meaning if the government did not interfere, business would prosper, and it did. Due to the lack of restrictions and regulations, big business was very prosperous during the 1920s. This, combined with new advancements in labor-saving technology, led to lower, more affordable prices for products.


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