The Roaring 20's
Name two reasons why the roaring 20s were called that.
- Era of Prosperity
- New social norms
- Speakeasies, parties, bootleg liquor
- New inventions
Who created the concept of laissez faire?
Adam Smith in 1776, who also created capitalism
What is a stock?
Partial ownership of a business/company.
An investment.
What is overproduction?
What is underconstumption?
Overproduction is when businesses make too much of a product.
Underconsumption is when consumers dont buy enough of a product.
What is another word for agriculture?
Farming
What does prosperity mean?
Doing well financially or materially.
What does laissez faire mean?
"Do not interfere"
It is a theory that governments make economies worse when they try to manage it, and therefore businesses and individuals should be free to make decisions.
The government should be hands-off the economy.
In what year did the stock market crash?
1929
What is a shortage?
What is a surplus?
A shortage is when demand exceeds supply (not enough product to meet the demand)
A surplus is when supply of a product exceeds demand for it (too much supply)
What conflict began the economic boom for farmers and why?
World War I (WWI)
Because European farming was disrupted and they still needed food.
What is a flapper?
A name for "modern" women in the 1920s who dressed more liberally, cut their hair, socialized without men, etc.
True or false:
The government rejected the theory of Laissez-faire during the 1920s.
FALSE!
All three presidents during the 1920s embraced Laissez-Faire policies
What is margin, and how does it work?
Margin is a loan to buy stocks, and it can supercharge your wins, but can worsen your losses
Why was overproduction a problem?
Main market saturation. Also, greed and the need to continue growing as a business played minor roles.
What did farmers do to take advantage of the situation?
Take out loans for land and equipment
Increase production
What did the 19th amendment do?
Give women the right to vote. (Suffrage)
How does Social Darwinism, or survival of the fittest, explain why some people are rich and others are poor?
People who are rich are better! They're smarter, stronger, better people and deserve to be rich.
People who are poor are because because of their own failures and bad decisions. They're bad people who are not very smart and are lazy.
Why did the stock market become popular.
Michael J. Meehan and his friends scammed the market and got everyone interested in getting rich quick.
List other names for Buyers and Sellers
Buyers = the people, consumers, customers, demanders
Sellers = businesses, producers, companies, suppliers
What went wrong?
Demand for American farm products drastically decreased when the war ended, but American Farms were left with debts and unsellable products (surplus, overnproduction)
Were the 1920s characterized by materialism? (Answer with explanation!)
Answer varies
Who does laissez faire benefit the most?
Rich white men who are already on top of society.
Why did the stock market fail?
Too much of the market was made up of margin, and once enough stock went into decline, it triggered a domino effect of forced selling
How did businesses overcome their underconsumption problem?
Creating desire and dissatisfaction (by advertising)
Allowing people who didn't have enough money to buy anyway (credit, installment plans)
Offer sales
Whose fault is it, and why?
Answers vary.