Question

Explain why economy of USA was strong in the early 1920s? Would you agree that the roots of the Great Depression lay in the boom? Give reasons for your answer. 

Answer 1

(i) Mass production became a characteristic feature of industrial production in the USA.
(ii) Mass production lowered costs and prices of engineered goods.
(iii) There was a spurt in the purchase of refrigerators, washing machines, etc., through hire purchase.
(iv) It was fuelled by a boom in house construction and home ownership, financed once again by loans.
Yes, the roots of the Great Depression lies in this boom because of the overproduction of industrial and agricultural sector.