Reasons economy boomed 1920s

• Millions of immigrants from Europe were prepared to work hard to establish a new life in the USA, contributing to the cheap labour force
• During WWI, the USA supported the Allies by selling materials and supplies, and later lent money to European governments for rebuilding
• Adoption of mass production techniques in the 1920s led to increased efficiency, reduced production costs, and more goods being sold
• In the 1920s, speculation on the Wall Street Stock Exchange led to increased investment and potential growth, but also posed risks due to unrealistic valuations
• The spread of electricity in the 1920s made domestic appliances desirable, leading to increased sales
• Availability of credit through hire purchase allowed consumers to buy expensive goods in monthly instalments, increasing sales and profits
• Power of advertising in the 1920s enticed more people to purchase goods, leading to increased profits
• Republican policies in the 1920s included laissez-faire, low taxation, protectionism, and rugged individualism, which promoted business growth
• Reasons for the economic boom during the 1920s

  • Plentiful resources
  • Abundant raw materials
  • Cheap labour force
  • Impact of WWI
  • Republican policies
  • Adoption of mass production techniques
  • Spread of electricity
  • Power of advertising
  • Availability of credit (hire purchase)
  • Speculation on the Wall Street Stock Exchange
• A number of factors combined during the 1920s to ensure that the USA's already strong economy grew substantially and quickly
• The USA had plentiful supplies of coal, iron, and timber, which could be exported or used for manufacturing chemicals, medicines, dyes, machinery, etc.