The U.S. and Global Economy During the Roaring Twenties

Which phrase best completes the diagram?

• Led to a wave of strikes across the country

• Stimulated a period of Progressive reforms

• Spurred a period of economic growth and prosperity

• Helped to bring about the Second Industrial Revolution

Answer explanation

The combination of pro-business policies, higher tariffs, lower taxes for the wealthy, and minimal government interference in business activities typically spurs a period of economic growth and prosperity. These measures are designed to create a favorable environment for businesses to thrive, leading to increased investment, job creation, and overall economic expansion.

Which groups did not generally participate in the economic boom of the 1920s?

• 
  manufacturers and real estate developers

• stock brokers and automobile workers

• bankers and construction workers

• minorities and railroad workers

Answer explanation

Minorities often faced systemic discrimination and limited economic opportunities, while the railroad industry was experiencing a decline due to the rise of automobiles and trucks, leading to reduced demand for railroad workers.

What was one impact of the changes shown in the graph?

• The U.S. government purchased the agricultural surplus from farmers.

• Farmers did not generally participate in the prosperity of the 1920s.

• Speculators bought up American farmland at inexpensive prices.

• Local food prices remained high because of domestic demand.

Answer explanation

The graph shows a decline in the value of U.S. agricultural exports from 1919 to 1926. This decline meant that farmers were not able to sell as much of their produce overseas, leading to lower incomes for farmers.

What was the primary cause of the changes to the unemployment rate in 1920 and 1921 shown on the graph?

• the effects of demobilization

• the impact of the “Red Scare”

• the passage of the Emergency Quota Act

• the Bolshevik victory in the Russian Civil War

Answer explanation

After World War I, the United States experienced a rapid transition from a wartime to a peacetime economy. This led to a temporary increase in unemployment as soldiers returned home and war-related industries reduced production.

What was a significant factor contributing to the economic prosperity of the 1920s?

• The implementation of the Gold Standard

• The end of World War II

• The introduction of the New Deal policies

• The widespread adoption of the assembly line

Answer explanation

The widespread adoption of the assembly line significantly boosted economic prosperity in the 1920s by increasing production efficiency and lowering costs.

Based on the diagram, which conclusion can be made about the international flow of funds in this period?

• German prosperity fueled European growth in the early 1920s.

• American prosperity helped to secure European stability in the early 1920s.

• French public opinion opposed the collection of reparations from Germany as unjust.

• The close connection between the American and European economies prevented U.S. leaders from raising tariffs during the 1920s.

Answer explanation

The diagram shows that the United States provided loans to Germany, which then made reparation payments to France and Britain. France and Britain, in turn, used these funds to pay war debts to the United States. This cycle indicates that American prosperity, through loans, helped to secure European stability in the early 1920s.