Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

British History 1918-1979 > 1B - Responding to Economic Challenges 1918-1945 > Flashcards

1B - Responding to Economic Challenges 1918-1945 Flashcards

You may prefer our related Brainscape-certified flashcards:
AP® U.S. History flashcards World History 101 flashcards European History 101 flashcards AP® European History flashcards AP® World History flashcards World History 102 flashcards U.S. History 101 flashcards U.S. History 102 flashcards
1
Q

Why was there economic damage after WW1?

A

Thought the war would have ended sooner than it did
GB had loaned money from USA
GB cut off from export markets by German U boats
GB industries had to produce for war rather than to export
¾ of men were lost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

How did German U boats impact the economy after WW1?

A

Sank 40% of GB merchant shipping at a time where exports account for ⅓ of total wealth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Why was there a negative balance of payments after WW1?

A

GB had continued to import as much as in the pre war period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How much debt was GB in in 1919 in relation to economic output?

A

136%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How much debt was GB in by 1920?

A

1920 - Total debt £8 billion, budget was £800 million and £300 million was used to pay debts

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

By how much had the standard rate of income tax increased between 1908-1924?

A

20%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Why did a brief post war boom occur between 1919-1920?

A

Individuals had savings in cash and bonds due to rationing, they spent these in 1919 to buy luxury items that had been previously rationed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

When did the recessions occur during the 1920s and 1930s?

A

1920-1921, 1929-1934 - hit heavy industry hard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Unemployment was high even in times of economic booms, what % was it between 1921-1938?

A

10%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What were the consequences of the 1920-1921 recession and the 1929-1934 recession?

A

Both recessions had periods of recovery after but industrial areas like Wales and Tyneside persistently struggled.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What happened in terms of light and heavy industries in the period of 1934-1939?

A

Rearmament and new light industries in the South East and the Midlands developed while heavy industry declined

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What was the speculative boom, 1918-1920?

A

Businesses issued new shares for traders, investors and for other businesses to buy and more money went into the London stock market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How were shares affected by the speculative boom, 1918-1920?

A

The total amount of new shares increased from £65 million in 1918 to £384 million in 1920

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Why did the speculative boom occur?

A

Due to investors being keen to buy GB shipyards, cotton mills and coal mines - but all poor investment choices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Why were cotton mills, shipyards and coal mines poor investment choices in the speculative boom?

A

New competitors emerged like the USA, Japan and South America. GB had put little investment into these industries during the war making them uncompetitive.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Why did the boom come to an end, 1920?

A

Wartime industries hadn’t returned to civilian usage properly and couldn’t keep up with the demand. Goods in short supply became expensive, demand declined

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

At what rate was unemployment in the recession of 1920-1921?

A

12%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

In what state was unemployment in 1921?

A

2 million were unemployed, South Wales and Tyneside were depressed as old industries like coal and ship building collapsed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What was the cost of living like in 1920 and how did this affect unions?

A

Increased by 25% between 1918-1920, wages stagnated meaning unions were likely to strike to secure higher living standards.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How did deflation contribute to the recession in 1921?

A

Spending cuts of 75%, IR raised to 7%, reduced money available for spending in order to repay war debts although debts increase by 40% of GDP anyway

21
Q

How did loss of global trade contribute to the recession in 1921?

A

Market loss in textiles - Japan began to supply India and South East Asia with cotton and silk in WW1. Textile industry in Northwest declined.

22
Q

How did global trade contract leading to the recession in 1921?

A

Global economy no longer dominated by GB because new foreign manufacturing competitors took advantage of the disruption to GB trade during WW1

23
Q

How did under investment in industry contribute to the recession of 1921?

A

1920s - manufacturers began importing US steel because of its better quality and price due to underinvestment in GB industry = wider deficit

24
Q

How did steel production differ between the USA and GB in 1937?

A

GB steel being produced at 83,000 tonnes p/a compared to US producing 210,000 tonnes

25
Q

How did poor industrial relations lead to 1921 recession after DLG had awarded workers with good pay and hours in 1919 to prevent a general strike?

A

When the economy struggled, workers wouldn’t accept less pay. Wage rates stayed high, products remained overpriced and uncompetitive

26
Q

Did productivity increase after the 8 hour working day was created in 1919?

A

13% decrease in working hours = no increase in productivity,

27
Q

Why did DLG advocate a policy of spending cuts to solve the recession of 1921?

A

He was anxious to appease MC voters who wanted tax cuts and less gov spending.

28
Q

What was the Geddes Axe in 1921?

A

Appointed Sir Eric Geddes to implement greater cuts in pubic spending, health, welfare + housing budgets were reduced from £205.8 million in 1921 to £182.1 million 1922-1923

29
Q

After free trade had previously been adopted, why did the gov want tariffs and protectionism in 1921 and why did DLG oppose this and resign?

A

PW recession so gov considered tariffs to protect GB industry and prevent increases in unemployment. DLG opposed tariffs and believed in free trade.

30
Q

How did RMD campaign himself in 1921?

A

Campaigned on the issue of unemployment, presented Labour as moderate not as socialists to please the Tories, the RW press and the middle and upper classes.

31
Q

How effective was RMD at managing the economy, 1921-24?

A

1921-1924 - unemployment declined from 12% to 6.5% but climbed throughout RMD’s premiership - 8% by 1925. Fall in inflation from 15% in 1920 to 1% in 1924. Due to unemployment as people weren’t spending

32
Q

How did SB cause an economic depression from 1924-1929?

A

Reintroduced GB to the Gold Standard

33
Q

What caused the economic depression from 1929-1934?

A

Oct 1929 - Wall Street Crash, Global trade contracted by 66% over the next 5 years, GB exports down by 50%

34
Q

How and which industries were impacted by the Wall Street Crash?

A 
Exports worth ⅓ of GNP, collapse in trade bad for:
Coal
Dock Work
Cotton
Iron and Steel
Ship Building
35
Q

How did the collapse in industry as a result of the Wall Street Crash impact the economy?

A

Unemployment was 1 million in 1929 and lept to 2.5 million in 1930 - put pressure on the gov, tax revenue declined, no. of people applying for financial assistance increased

36
Q

What state was the economy in in 1931?

A

GB economy shrank by 5% but main problem was keeping the pound on the Gold Standard through spending cuts and high interest rates

37
Q

Within the Labour gov, what debate was held over debts and rising unemployment in 1931?

A

Chancellor of the Exchequer - Philip Snowden wanted unemployment relief to come from corporate profits but Keynes suggested spending on public works - new roads to create jobs.

38
Q

Why did Snowden disagree with Keynes in 1931?

A

Believed that London and NYC bankers didn’t want public spending to increase because it would mean the value of the GB bonds would decrease. Defense industry was the only sector that the gov invested in.

39
Q

What happened to the economy in the summer of 1931?

A

Rumours that budget would be unbalanced - US banks panic sold their reserves of the pound. Pound fell in value. Gov cut spending to please banks: 10% cut in unemployment benefit - kept pound stable but hit the poorest.

40
Q

How did the NG respond to economic problems in 1931?

A

Implemented spending cuts - cut public sector pay by 10% and introduced a means test for unemployment assistance.

41
Q

How did the NG help those hit the hardest by the depression in 1934?

A

Special Areas Act - Identified Tyneside, south Wales, Cumberland + Scotland as regions in need. Only small investment was made - ineffective

42
Q

How did the economy recover between 1932-1939?

A 
Real incomes rose by 19%
Industrial production rose by 46%
GNP rose by 23%
Exports increased by 28%
Unemployment fell by 8.5%
43
Q

When did GB come off the gold standard and what impact did it have?

A

1931, Economic growth then averaged at 4% between 1934-1937

44
Q

Why were interest rates cut, 1934-1937?

A

Easier for businesses and individuals to borrow = more spending + job creation; also less attractive to save money = invested in property = housing boom in South East and Midlands

45
Q

Why was a degree of inflation allowed, 1934-1937?

A

to stimulate spending which let prices rise slightly e.g invested in road industry = fuelled growth of cars

46
Q

How did coming off the Gold Standard impact the economy, 1934-1937?

A

Exports cheaper and more competitive
Banks more willing to spend
Restructured war debts: 25% of tax rev instead of 40%

47
Q

What did the gov take control of during the war years?

A 
Ministry of Aircraft production
Ministry of Supply
Ministry of War Production
Ministry of Food
Ministry of Labour and National Service
48
Q

How did gov manage military expenditure during the war?

A

GB started rearming before the war - 1939 - still shortages in military equipment. 1940 - GB seemed to be losing war, growth of state intervention = huge increase in war production + military expenditure

49
Q

How much economic aid did GB receive during WW2?

A

1939 American Neutrality Act allowed GB to buy supplied with cash only but by Dec 1940 war reserves were spent, Lend Lease Agreement set up, US Liberty ships provided essential supplies

British History 1918-1979 (34 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions