Chapter 22 Section 2

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
– 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
• Electric power for
homes and industries
• A plentiful supply of oil
• Efficient manufacturing
• Easy credit
Assembly line
• A manufacturing
process in which each
worker does a
specialized task in the
construction of the final
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
• 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
• Fewer hard facts about
the products were
• 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
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
• allowing customers to
pay on installment plans
• Developing new chain
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
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
• Attendance in church
on Sunday was on the
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