1. Business Fever Chapter 24, Section 2

2. In the 1920’s factories poured out new goods Refrigerators Other electric appliances New low priced cars Output and consumer spending rose so the economy boomed

3. A Booming Economy Coolidge prosperity: name given for these economic good times Most Americans incomes rose People bought more goods This fueled future growth

4. World War I had helped the economy Europeans ordered supplies from U.S. factories U.S. government spent millions on equipment for American soldiers During the war millions of people moved from rural areas to the cities More than half a million African Americans moved from the South to the North to work in cities

5. A Booming Economy 2 million soldiers came home when the war ended looking for jobs Factories stopped turning out war materials Result was a recession 1923-1929 economy grew Factories switched to producing consumer goods

6. The Auto Industry Fuels Growth Auto boom spurred growth in related fields Steel and rubber

7. Affordable cars Car prices dropped Ordinary Americans could afford to buy a car Henry Ford: assemble line wanted to make the cars identical Cut assembly time 1927 General Motors passed Ford as the top auto maker Sold variety of models and colors

8. A ripple effect Car sales spurred growth in other parts of the economy Created jobs in : Steel mills Paint Glass Oil Gasoline refineries States and town paved roads and built highways Gas stations, tourist cabins, and restaurants Cars changes the way Americans especially younger Americans behaved

9. New goods for Sale Cars, electric refrigerators, radios, phonographs, vacuum cleaners, and many other appliances including the telephone

10. Buy now pay later Installment buying: buying on credit Americans could buy things they couldn’t afford Increased the demand for goods Consumer debt jumped

11. Advertising Encouraged people to think they would be happy if they bought products

12. Stocks Surge Economic boom caused a stock market boom 1920’s more people invested in the stock market than ever before Stories of ordinary people becoming rich drew others into the stock market

13. Stocks Surge Bull market: name given to the soaring market On margin: similar to installment buying, buy stock with just 10% down 1928-1929 stocks rose higher than the value of the companies themselves Unhealthy sign