1b - Economic landscape Flashcards
What are the main factors for ECONOMIC PROBLEMS in the interwar years?
The LEGACY of WW1 (debts, rebuilding costs)
Ineffective solutions in MANAGING THE ECONOMY during the 1920s
Rise of the TRADE UNIONS
Impact of the DEPRESSION
How did LOSS OF TRADE affect Britain after WW1?
SHIPS WERE OCCUPIED with moving essential war supplies - 20% were sunk in the process.
Economic RIVALS took over following the decline in British exports.
Britian COULDN’T TRADE with countries she was still at war with; these places became SELF-SUFFICIENT producing goods they would’ve previously got from Britain.
How did DEBT affect Britain after WW1?
The war cost Britain £3.25 billion, with debts of £8 billion by 1920 - mainly to US banks.
Wartime debts rose to 160% of income in 1924.
How did the CHANGING VALUE OF THE POUND affect Britain after WW1?
The value of the pound fell - Britain had been forced to leave the Gold Standard in 1914 in order to print more money to fund the war.
This resulted in a RISE OF INFLATION and a DROP in the value of the pound (£1 valued at $3.19 in 1919)
Inflation rose to 25% in 1918 which impacted prices.
How did TECHNOLOGICAL ADVANCEMENTS affect Britain after WW1?
Technology accelerated the war - particularly in MEDICINE and TRANSPORT
Britain FELL BEHIND in technological development; European countries saw many FACTORIES DESTROYED and so were forced to buy NEW EQUIPMENT, giving them an edge over British factories.
Britain returned to _____ ________ in ____, which restored the _____ to its pre-war value of ____
Britain returned to the Gold Standard in 1925, which restored the pound to its pre-war value of $4.86
How was the WORKFORCE impacted after the War?
900,000 men were killed in WW1 - a large portion of the workforce.
How were TRADITIONAL INDUSTRIES affected by the RETURN TO THE GOLD STANDARD?
The HIGH EXCHANGE RATES made British exports more EXPENSIVE and LESS COMPETITIVE coal, steel, shipping and textiles industries had a hard time selling abroad.
“America’s rise”, Keynes claiming the POUND was OVERVALUED by 10% compared to the dollar and the USA’s LOW INTEREST RATES made America’s exports far better than British ones, damaging Britain’s export market.
