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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.

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Chapter 22 Section 2

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  1. Chapter 22 Section 2 A Business Boom

  2. Consumer Economy • An economy that depends on a large amount of spending by consumers (People that buy stuff)

  3. Installment Plan • A consumer can make partial payments at a set interval of time until the total debt is paid

  4. 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

  5. Gross national Product (GNP) • The total value of good and services a country produce annually

  6. 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

  7. 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

  8. Assembly line • A manufacturing process in which each worker does a specialized task in the construction of the final product

  9. 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

  10. 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

  11. 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

  12. 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

  13. What was the goal of the American consumer economy of the 1920s? • to consume as many goods as possible to keep the economy growing

  14. 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

  15. 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

  16. The rise of this new consumer economy caused many American industries to grow. Which of the following industries declined? • textile industry

  17. Why did the number of Americans purchasing automobiles increase? • They purchased on credit

  18. 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

  19. 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

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