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1K The Making of a Superpower: USA, 1865–1975

The Boom of the 1920s and the Wall Street Crash

  • 3 things to know
  • Component 1

Overview

Recall questions on mass production, consumer credit, new industries and the stock market in the 1920s boom, the weaknesses of overproduction, inequality, banking and margin buying, and the Wall Street Crash and its consequences.

What you need to know

Answer each one before you reveal it.

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Key term

What role did consumer credit play in driving the 1920s economic boom?

Key term

How did agricultural overproduction weaken the 1920s economy?

Key term

What was margin buying and why did it create economic instability?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    How did mass production techniques contribute to the 1920s economic boom?

    Model answer

    They enabled faster, cheaper manufacturing of goods, increasing output and lowering prices for consumers.

  2. 2

    What role did consumer credit play in driving the 1920s economic boom?

    Model answer

    The expansion of consumer credit allowed Americans to purchase goods on instalments, stimulating demand for new products.

  3. 3

    Which new industries drove economic growth in the 1920s?

    Model answer

    Automobiles, electrical goods, and radio.

  4. 4

    How did the stock market contribute to the 1920s economic boom?

    Model answer

    Rising stock market speculation created wealth and encouraged investment, though it also created instability.

  5. 5

    How did agricultural overproduction weaken the 1920s economy?

    Model answer

    Farmers produced more than markets could absorb, causing falling prices and rural poverty that reduced overall economic stability.

  6. 6

    Why was wealth inequality a structural weakness of the 1920s economy?

    Model answer

    Uneven distribution of wealth meant most Americans lacked purchasing power to sustain demand for consumer goods.

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