Why did the American economy boom in the 1920s?

• America had many natural resources such as coal, iron ore and oil

• It was the world’s largest steel producer

• Republican policies freed the economy to grow

• The American economy also benefited tremendously from WW1

• It had benefited from the one-way trade in munitions and food

• It had gained markets during WW1

• Exports were double the value of imports by the end of the war

• It took advantage of technological changes, e.g. the mass production of the assembly line

• There was a rapid spread and use of electricity

• Mass production made goods cheaper so more people could afford them

• It developed new industries such as plastics and the electrical and chemical industries

• The car industry alone boosted so many other industries, e.g. oil, iron and steel, rubber, leather

• Confidence was very strong which encouraged both investment and spending

• Advertising became an industry in its own right

• And credit was made available