1. Chapter 24, Section 3 Notes

2. Recession When the economy turns downward and is not doing well

3. Gross National Product The total value of all goods and services produced in a country during a given time

4. Productivity The amount of work each worker can do

5. Installment Buying Buy now and pay small, regular amounts over a period of time

6. Effects on Economy Scientific management - hired experts recommended new work methods that lowered business costs by increasing productivity. Assembly line – increased productivity and decreased production costs Installment buying – increased consumer spending

7. Sequencing of Events 1922 – Nation’s GNP reaches $70 billion 1924 – Price of Model T drops under $300 1927 – Ford releases Model A 1929 – Electricity reaches 70% of factories

8. Economic Growth The nation’s economy boomed in the 1920s. One contributing factor was the spread of electricity to factories.

9. Scientific Management New management techniques aimed to improve workers’ productivity. The spread of the assembly line cut costs.

10. Worker Relations Businesses tried to achieve better relations with workers. They adopted safety programs to cut down on injuries and other plans to tie them more closely to their employers.

11. The Consumer Economy Consumers enjoyed new labor-saving devices that cut down the amount of time they spent on housework. They also enjoyed movies and radio, which became new media for mass entertainment.

12. Terms to Know Gross national product – measure of the country’s economic output Installment buying – using credit to purchase expensive goods in steps Productivity – the amount of work each worker can do Recession – economic slowdown Scientific management – system based on hiring experts to study how goods could be made more quickly Welfare capitalism – business philosophy based on caring for workers’ welfare

13. Importance of the Automobile Car ownership nearly tripled; about four million people worked in the auto industry or related industries.

14. Ford Pays Workers Higher Wages Ford’s workers were happy, and they were potential customers for his cars as the prices of those cars dropped. A happy worker is a productive worker. A supportive worker will buy the product he/she helps to produce.

15. Effect of Cars on Other Industries Other industries boomed, including road construction, tourism, steel, rubber, and glass.

16. Groups with Problems Farmers suffered following WWI because of huge crop surpluses. Workers in the railroad and coal mining industries because cars and trucks, gas, and electricity were being used. Textile workers

17. Model T vs. Model A The Model T was Ford’s original mass- produced car, which was sturdy, reliable, inexpensive, and sold only in black. It was very popular, and the price steadily fell. When other car companies started bringing out more competitive cars, Ford introduced the Model A, which had better engineering and more colors.

18. Prosperity Affects Nation New appliances meant that people could spend less time on housework and had more leisure time. People began to purchase goods using credit.

19. Cars Impact on American Life The nation’s economy revolved around the automobile, and so did people’s lives.