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The Economic Boom

The Economic Boom. Analyze the consumer revolution and the bull market of the 1920s . Explain the impact of Henry Ford and the automobile. Objectives. consumer revolution – a flood of new, affordable goods

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The Economic Boom

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  1. The Economic Boom

  2. Analyze the consumer revolution and the bull market of the 1920s. • Explain the impact of Henry Ford and the automobile. Objectives

  3. consumer revolution – a flood of new, affordable goods • scientific management – analysis of a manufacturing process to improve speed and efficiency • mass production – therapid, large-scale manufacture of identical products • assembly line – manufacturing technique in which products move past workers, each of whom adds one small component Key Vocabulary

  4. Henry Ford/Model T – applied mass production techniques to manufacture automobile; affordable on the mass market • installment buying – buying on credit bymaking an initial down payment and then paying the balance over time Key Vocabulary

  5. How did the booming economy of the 1920s lead to changes in American life? 1) Using mass production techniques, workers produced more goods in less time than ever before. 2) The boom changed how Americans lived and helped create the modern consumer economy. Much of this boom can be traced to the automobile.

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  7. Henry Ford applied the process of scientific management to production. This leads to the development of the assembly line. Production time is reduced, allowing cost to drop. More people can now afford to buy. Other industries quickly follow Ford’s innovation in production. http://www.youtube.com/watch?v=IXkxl8dSXb4

  8. Ford also raised his workers’ pay and shortened their hours. The time to assemble a Model T dropped from 12 hours to just 90 minutes. With more money and more leisure time, his employees would be potential customers. By 1927, 56% of American families owned a car. Ford creates customers

  9. Road construction boomed, and new businesses opened along the routes. • Other car-related industries included steel, glass, rubber, asphalt, gasoline, and insurance. • Workers could live farther away from their jobs. • Families used cars for leisure trips and vacations. • Fewer people traveled on trolleys or trains. Impacts of the car

  10. What would you do with more money?

  11. The 1920s saw a consumer revolution. Using installment buying, people could buy more. New products flooded the market. Advertising created demand. A new cycle emerges

  12. bull market – a period of rising prices in the stock market • buying on margin – buying stock on credit by paying a percentage up front and borrowing the rest of its cost The Stock Market

  13. Throughout the 1920s, a bull market meant stock prices kept going up. • Investors bought on margin, purchasing stocks on credit. Rising stock market prices also contributed to economic growth. By 1929, around four million Americans owned stocks. The Stock Market

  14. During the 1920s, cities grew rapidly. WHY?

  15. More and more people who worked in cities moved to the suburbs. Cities expanded outward, thanks to automobiles and mass transit systems. While cities and suburbs benefited from the economic boom, rural America struggled.

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