Describe the problems faced by some parts of the economy in the 1920s
The 1920s was a time of big developments and changes for America. With new time and money saving ideas like mass production; homes being filled with new household appliances and gadgets like radios, fridges and vacuum cleaners, and a boost in the entertainment industries with the American people falling in love with the talkies, it was not a surprise that the economy sky rocketed with its gross national product rising from $78 billion to $103 billion. Nevertheless, they weren’t all winners and parts of the economy did face problems and suffer as a direct result of the economic boom. Farmers probably faced the biggest problems due to the economic boom in the 1920s. They had been producing large amounts of crop during the war, having bought more land and better equipment in order to grow more food because they were catering for themselves as well as the European market. When the First World War did end, they continued to produce crops at the same rate but now did not sell as much, causing prices to drop dramatically. In addition to this, Prohibition meant that there was less demand for crops used to make the illegal alcohol. New synthetic fibres and fabrics had also been developed meaning that the demand for wool and cotton fell too. Furthermore, the new machinery development within the 1920s resulted in less workers being needed but just as much produce was being grow regardless of the drop in demand and usage.
Another part of the economy which faced problems as a result of the economic boom were older industries like railway and coalmining. They did not benefit from the new ideas that had caused the boom in the first place, such as the assembly line, and therefore could not adapt themselves to meet the more modern demands. During the war, coalmining had been at full production but once it had ended, the use of coal decreased rapidly. American citizens preferred to use more convenient...
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