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Learning Objectives
After this chapter you should be able to:
1.
2.
3.
4.
5.
6.
7.
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1-3
Poverty
Expanding technologies
Dying industries
Fewer Americans
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1-5
Agricultural development
Development of transnational railroad network
The emergence of industrial capitalism
centuries
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Agricultural Development
At the start of the American Revolution, America had
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Fewer than 4 of 10 people lived on farms, yet technology meant U.S. had
farm surpluses, encouraging labor to leave farms for factories.
The U.S. was among the world leaders in production of steel, coal,
steamships, textiles, apparel, chemicals, and agricultural machinery.
Transition from private electric generators to centralized, utility-based
power production made manufacturing cheaper.
than imports.)
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1-13
Were they a net positive or net negative factor in the nations economic
development?
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1-15
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Automobile market saturated. One car for nearly every household and most
were less than six years old.
Tire industry, textiles, and residential construction also overbuilt.
Stock market crash made consumers wary.
Federal reserve cut money supply causing deflation.
Nothing done about bank failures under Hoover administration.
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Recovery Stalled
Recession of 19371938 was reignited by actions of
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19391944
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The U.S. accounted for of the worlds manufacturing output, with just 7%
of the worlds population.
U.S. and the Soviet Union were the only superpowers left.
The U.S. expended 6% of national output on defense. The Soviet Union
expended at least 18% of national output on defense, which contributed to its
collapse in 1990.
The U.S. spent tens of billions of dollars to prop up the economies of
Western Europe and Japan, and hundreds of billions more for their defense
as allies against the Soviet Union.
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Suburbanization of America
A housing shortage arose, the only place to build was outside cities. This
required roads and cars.
The federal government subsidized an interstate highway network along with
state freeways, state highways, roads, and local streets.
Government investment spurred private sector.
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1-25
Why was the war followed by inflation? Is war a good solution for an
economic crisis?
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elected.
Nixon became President in 1968; Ford became President when Nixon resigned in
1974.
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theory.
Consumers would have more incentive to work and more of their own money
to spend.
Businesses would invest more and produce more.
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1-30
Keynesian economics?
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1-33
downturn.
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