1. Chapter 22 Section 2
A Business Boom

2. Consumer Economy
An economy that depends on a large amount of spending by consumers (People that buy stuff)

3. Installment Plan
A consumer can make partial payments at a set interval of time until the total debt is paid

4. What does the sundries category say about life in the 1920s?
That life was somewhat more simple than it is today
Entertainment was not as expensive

5. Gross national Product (GNP)
The total value of good and services a country produce annually

6. How did the gross national Product change in the 1920s?
It grew steadily and pretty noticeably
It grew at an average rate of 6% per year

7. What factors allowed for a rise in productivity in the 1920s?
Rapidly growing GNP
New advertising techniques
Electric power for homes and industries
A plentiful supply of oil
Efficient manufacturing techniques
Easy credit

8. Assembly line
A manufacturing process in which each worker does a specialized task in the construction of the final product

9. How did Henry Ford change his assembly line to increase efficiency?
His assembly line moved, while the workers stayed in place
People criticized his system because it would be boring
Ford insisted his employees enjoyed it

10. What conditions made a consumer economy possible in the 1920s?
Increased wages and incomes
Technologically advanced new consumer products
Lower costs
Clever advertising
Widespread availability of credit

11. How did the advertising industry help to develop a consumer economy?
Advertising no longer sold only products
Its sought to make new consumer goods seem glamorous
Fewer hard facts about the products were presented
They focused more on what would make a person more stylish

12. List all the factors that led to increased consumer spending in the 1920s.
Higher wages
Higher incomes
Clever advertising
New products
Lower costs
Easy credit

13. What was the goal of the American consumer economy of the 1920s?
to consume as many goods as possible to keep the economy growing

14. What is installment credit?
A person put no money down for a product for at least six months, giving him enough time to produce the product
a person only paid half of the cost of the product one month, then paid small amounts each additional month
A person paid for a product in different installments each month

15. How did companies in the 1920s increase their sales and profits?
Creating new advertising
allowing customers to pay on installment plans
Developing new chain stores

16. The rise of this new consumer economy caused many American industries to grow. Which of the following industries declined?
textile industry

17. Why did the number of Americans purchasing automobiles increase?
They purchased on credit

18. What concerns did some people have about the effect of automobiles in the United States?
Some people said it led to arguments between parents and teenagers over use of the automobiles
Attendance in church on Sunday was on the decline

19. What aspect of the consumer economy also was one of the causes of the Great Depression?
People were unable to repay the marginal cost of the declining stock