Credit Availability and 1920s US Growth
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How important was the availability of credit as a cause of economic growth in the USA in the 1920s? Explain your answer.
ESSAY
The availability of credit played a significant role in the economic growth of the USA in the 1920s. Hire-purchase schemes allowed lower-income Americans to purchase new products and household appliances by paying in installments. This led to increased sales, wider market reach for companies, and profits from interest. The availability of credit also boosted consumer confidence and share prices. Moreover, banks became more willing to lend money to businesses, promoting industry expansion and technological advancements such as assembly line production. Additionally, the popularity of "buying on the margin" contributed to the growth, as more Americans became speculators. However, other factors like the car industry, assembly line production, Republican policies, powerful trusts, advertising methods, natural resources, and the aftermath of the First World War also played a significant role in the economic growth of the USA in the 1920s. These factors include the revolutionary impact of assembly line production on industries' efficiency and costs, the growth of the construction industry due to infrastructure development, favorable Republican policies, the support of powerful trusts, effective advertising methods, the abundance of natural resources, and the boost from the capital accumulated by banks during the First World War.
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How important was the availability of credit as a cause of economic growth in the USA in the 1920s? Explain your answer. Yes Availability of hire-purchase schemes allowed poorer American consumers to buy new products and household appliances such as cars, radios and vacuum cleaners; people could now pay in instalments and companies made profits from increased sales, a wider market for their goods and from the interest; increased consumer confidence and boosted share prices; banks more willing to lend money to businesses allowing them to expand and develop their industries with new technology such as assembly line production; 'buying on the margin' became increasingly popular as many more Americans became speculators in the late 1920s, etc. No More important – role of the car industry and Henry Ford; assembly line production revolutionised industries and increased efficiency and lowered costs due to standardised parts and cheaper labour costs; knock-on effect to other industries such as rubber and glass; construction industry grew and was largest employer in the USA as road building and suburb development expanded; Republican policies increased spending culture in the USA, low taxes, tariffs and laissez-faire attitude to business; powerful trusts helped guarantee lower costs for raw materials such as oil and steel; advertising methods effective; USA’s natural resources; First World War helped US banks build up huge capital to lend American industry; better wages for some including workers in newer industries led to increased expendable income, etc.