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The Roaring 20s: A G rowing Economy

The Roaring 20s: A G rowing Economy. Ch 8.2. Monday, March 26, 2012. Daily Goal: Understand what factors fueled the growing economy in the 1920s. Custom Made v Mass Produced. Why cars sucked before Ford…. Too expensive for the average American

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The Roaring 20s: A G rowing Economy

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  1. The Roaring 20s: A Growing Economy Ch 8.2

  2. Monday, March 26, 2012 • Daily Goal: Understand what factors fueled the growing economy in the 1920s.

  3. Custom Made v Mass Produced

  4. Why cars sucked before Ford… • Too expensive for the average American • Hand-built by skilled metal workers-increased prices • They took a long time to make each-increased prices • Each part was made from scratch-increased prices, made them unreliable and almost difficult to repair.

  5. ASSEMBLY LINE PRODUCTION

  6. $265 =$2742 IN 2002 DOLLARS $685.00 =$7089.00 IN 2002 DOLLARS $775.00 =$7863.00 ON 2002 DOLLARS New Industries and Prosperity •  Americans enjoyed higher wages and more leisure time than ever before. •  New technologies, such as automobiles, airplanes, and radios, led to new industries, while new methods of production increased output and lowered the prices of consumer goods.

  7. A New Way of Making Everything • Mass Production was improved by the Assembly Line introduced by Ford, which divided production into simple jobs for unskilled workers. • Reduced: costs/prices, production time.

  8. Prices tumbled! • 1908 Ford Model T (pre-assembly line) $850 • 1914 Ford Model T (assembly line) $490 • 1924 Ford Model T (improved assembly line) $295 • Cheaper cars=More buyers! More sales!

  9. Radio • Popular • Recorded music • Sporting events (baseball) • Elections + news • 1st commercial broadcast KDKA (Pitt) – Harding/ Cox election results • Growth in mass media = growth of national culture

  10. Discussion Questions • What messages do Advertisers use to sell you a product?

  11. Which sounds like a better deal? • Your shopping for a nice new flat screen TV and decide on 60 inch that costs $1200. • The store is currently offering a monthly installment plan, which reduces the cost to just $50 a month. • Which would you rather pay? $50/month? $1200 cash?

  12. Easy Credit fuels the Car Industry • Your car has just broken down. • You go to the dealer and they tell you replacing the transmission is $2000, far more than you have. • A salesmen then tells you that you can have a brand new car for a low monthly payment. • You use your repair money for a down payment and buy a new Honda Civic for $250/month.

  13. Discussion Questions • Is debt bad? • A Car loan is debt. • A Home Mortgage is debt. • Does credit (loans) encourage people to spend more? • Does credit (loans) encourage people to overspend?

  14. Mass Consumption • advertising and easy creditencouraged consumer spending and fueled a booming economy.

  15. Growing Wages • Ford paid his workers an unheard of $5/day • Used high wages to discourage workers organizing into unions.

  16. Farmers Struggle • Farmers had borrowed to increase production during WWI and when the War ended they had no way to pay back loans they had taken out • A “silent depression” began in agriculture.

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