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The Roaring Economy. Was Everything really getting better?. The Normal Business Circle. Why was everything getting better?. Government Fiscal Policies: Laissez-Faire Economics French for “Hands off”
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Was Everything really getting better? The Normal Business Circle
Why was everything getting better? • Government Fiscal Policies: • Laissez-Faire Economics • French for “Hands off” • Meant that there was little government intervention and businesses could do what they wanted • This helped ease the pain of losing the money we made selling war goods.
Why was everything getting better? • Credit • It was really easy to buy things. • People would get credit and spend the money • People could buy their stocks on credit.
What Was Really Happening • The Credit system was flawed • When they couldn’t pay the money back they went into debt. • The money that people spend was imaginary, because the banks didn’t actually have it either. • When the govt. doesn’t regulate businesses, problems happen. • Companies reported their stocks were worth more than they actually were.
In Conclusion • It really wasn’t getting that much better • These problems would lead to the Great Depression
Roaring Economy Wrap Up • What is Laissex-Faire economics? • How did the concept of credit work? • What were the long term consequences of these economic policies?