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The main way in which economic development affected urban residential patterns was by contributing to the beginnings of what we would now call "sprawl." Economic development (along with technological developments) created a large new middle class that could move out of the inner cities and into new suburbs.
As the Gilded Age brought in more large companies and more of a need for white collar employees, the size of the middle class increased. At the same time, innovations in mass transit such as the development of electric trolleys allowed the middle class to move away from the inner cities and out into the "streetcar suburbs."
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