Consumerism:
Consumerism in the 1920's was the idea that Americans should continue to buy product and goods in outrageous numbers. These people neither needed or could afford these products, which generally caused them to live pay-check to pay-check. People bought many quantities of products like automobiles, washing machines, sewing machines, and radios. This massive purchasing period led to installment plans. These were plans for people in which they were able to purchase their products and pay for them at a later time in small monthly payments. This was the reason why "80% of Americans during the 1920's had no savings at all - they were living pay-check to pay-check" (Textbook). This consumerism later became a contributing factor to the start of the Great Depression because it greatly increased the amount of consumer debt in America.
False Prosperity:
False Prosperity was the time where the economy was believed to be thriving, however, it was really suffering. As a result of consumerism, where people were buying much more than they really needed, it seemed like the economy was doing well. People created installment plans so they would be able to buy more yet pay for them at a later point. This created many people to struggle for money since they were relying on their next incoming paycheck to pay for the goods they were buying. The purchasing of products made it seem like the economy was doing well, yet it only hid the fact that it was actually suffering and most people were in debt.
Income Gap:
The income gap of the 1920's was the difference in income between the top 1% of wealthy Americans and the rest of the average earnings. Within this income gap, "60% of Americans earned below the poverty level. The top 1% of wealthy American's saw their incomes increase by 75% during the 1920's... the other 99% of Americans saw their income increase by only 9%... not enough to justify the huge expenditures on consumer products that most Americans were making" (Textbook). This shows that there was a great split between those who earned an average income or less compared to the wealthy who earned a considerably larger amount of money.