THE ROARING 20S 1920 1929
AMERICAN ECONOMY IN THE 1920S
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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installment buying and an unregulated stock market.
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the expansion of civil rights to women and minorities.
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the mobilization of the economy for war.
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increased government restrictions on big business.
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Detailed explanation-1: -The main reasons for America’s economic boom in the 1920s were technological progress which led to the mass production of goods, the electrification of America, new mass marketing techniques, the availability of cheap credit and increased employment which, in turn, created a huge amount of consumers.
Detailed explanation-2: -A wave of stock swindles and business frauds took place during the 1920s. But the most striking manifestation of the decade’s speculative frenzy was the stock market boom of 1928 and 1929. After rising steadily during the 1920s, stock prices began to soar in March 1928.
Detailed explanation-3: -Throughout the 1920s a long boom took stock prices to peaks never before seen. From 1920 to 1929 stocks more than quadrupled in value. Many investors became convinced that stocks were a sure thing and borrowed heavily to invest more money in the market.
Detailed explanation-4: -According to a 1989 analysis by Milton Friedman and Anna Schwartz, the recession of 1920–1921 was the result of an unnecessary contractionary monetary policy by the Federal Reserve Bank. Paul Krugman agrees that high interest rates due to the Fed’s effort to fight inflation caused the problem.