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NATURE OF THE ECONOMY Adam Smith and the Invisible Hand. Market works out the inefficiencies. Demand drives prices, supplies and companies. No government.

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Presentation on theme: "NATURE OF THE ECONOMY Adam Smith and the Invisible Hand. Market works out the inefficiencies. Demand drives prices, supplies and companies. No government."— Presentation transcript:

1 NATURE OF THE ECONOMY Adam Smith and the Invisible Hand. Market works out the inefficiencies. Demand drives prices, supplies and companies. No government is needed as everyone competes and the system works. Competition: 200 hundred corporations owned 50% of the corporate wealth! Between 1919 & 1928 1,200 mergers took place. Coolidge, Hoover and Mellon

2 DISTRIBUTION OF WEALTH Broadened during the Twenties. Disposable income Savings Productivity outpaced wage growth.

3 CONSUMER HABITS Convinced people to consume Installment credit- Put off the problems

4 WORLD ECONOMY- DAWES PLAN Germany pays the Allies The Allies pays the US US invests in Germany

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