Chapter 22 Section 2 A Business Boom
Consumer Economy An economy that depends on a large amount of spending by consumers (People that buy stuff)
Installment Plan A consumer can make partial payments at a set interval of time until the total debt is paid
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
Gross national Product (GNP) The total value of good and services a country produce annually
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
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
Assembly line A manufacturing process in which each worker does a specialized task in the construction of the final product
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
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
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
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
What was the goal of the American consumer economy of the 1920s? to consume as many goods as possible to keep the economy growing
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
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
The rise of this new consumer economy caused many American industries to grow. Which of the following industries declined? textile industry
Why did the number of Americans purchasing automobiles increase? They purchased on credit
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
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