Section 2 “A Business Boom” Page

 Consumer economy  Installment plan  Gross National Product (GNP)  assembly

 A Consumer Economy  Ford and the Automobile  Industrial Growth  Bypassed by the Boom

 Invention of automobile  eos/car-invented-world-drastically-changed eos/car-invented-world-drastically-changed  Ford’s proposal  eos/henry-fords-motor-company eos/henry-fords-motor-company  Henry Ford & the Model T   Inventions of the 1920s  twenties/videos/1920s-inventions twenties/videos/1920s-inventions

 Focus is the consumer  Increased spending means larger profits which pushes up wages (encourages more spending)  Sparked spending: higher wages, clever advertising, new products, lower costs, and available credit.

 Buying on Credit ◦ Consumer loans widely available ◦ Installment plans used to increase profits ◦ Fueled the growth of spending  Electric Power ◦ Appliances created a demand for electricity ◦ Cities gained, rural areas (no)  Advertising ◦ Spoke less about the product and more about how the product could enhance the consumer’s image  Rise in Productivity (new resources, new management methods, and new technology)

 “Model T”  Ford’s Assembly Line ◦ More efficient (worker stayed in place) ◦ Critics claimed that its endless repetition of tasks, strained workers both physically and mentally. ◦ Used vertical consolidation  A complex businessman ◦ (raised wages but fought power of unions)

 Automobile became the nation’s biggest single manufacturing industry  New businesses: garages, car dealerships, motels, campgrounds, gas stations, and restaurants.  Republican laissez-faire policies allowed the nation’s businesses to sour.

 Unskilled laborers remained poor: African Americans and migrants.  Farm prices plummeted after WWI, devastating farmers  Cotton farmers suffered (low prices)  Less demand for coal

 A) required employees to learn too many skills.  B) were too inefficient for pass production.  C) strained workers physically and mentally.  D) effectively prevented unions from forming.

 A) a Midwestern automobile manufacturer founded in the 1920s.  B) the total value of all products produced by a single worker in a year.  C) the total value of all products produced by all assembly-line workers in a year.  D) the total value of goods and services produced by a country in a year.

 A) Model T and Model A.  B) Model T and Quadricycle.  C) Chevrolet and Model T.  D) Model A and Model B.

 A) help customers get products installed in their homes.  B) speed up production of goods.  C) increase profits by loaning money and charging interest.  D) reduce consumer debt and encourage spending.

 A) steelmaking  B) automobile production  C) house construction  D) oil refining

 A) sell cars at higher prices.  B) sell cars at prices ordinary Americans could afford.  C) produce cars without factory workers.  D) gain a monopoly on the automobile industry.

 A) horizontal consolidation.  B) vertical consolidation  C) mass manufacturing.  D) economies of scale.

 A) people make everything they need.  B) most people work at home.  C) people buy large numbers of products.  D) only the rich can afford modern products.

 Several factors helped spark more buying in this decade, including higher wages, clever advertising, new products, lower costs, and the widespread availability of credit.

 American farmers prospered during the 1920s.

 Clever advertising made this form of buying acceptable to the American people.

 Decreased spending leads to larger profits for businesses, which in turn pushes up wages and encourages even more spending.