Question

Why were the policies of the Republican governements an important factor in the economic 'boom' of the 1920s in the USA?

Answer 1

The government had introduced republican policies. Republicans believed that the government should interfere as little as possible in the everyday lives of people. This attitude is called 'Laissez Faire'. In their view, the job of the president was to leave the business man alone, and to let him do what he wants to do. They kept taxation as low as possible, and did not tax wages or profit of the business. The government thought that if the consumer's money was not spend on tax then it would be spend on consumer goods, which would help the economy. The government also protected American industry by placing tariffs on foreign goods coming into the USA. This approach called protectionism made a foreign product more expensive than the same American product.

Answer 2

Thanks!