24 - Thatcher's Economic Policies And Their Impacts Flashcards
What ideology influenced Thatcher’s economic policies?
The New Right
Which Chicago economist is monetarism associated with? What did he describe as the greatest economic ill?
Milton Friedman
Inflation
How did Friedman believe governments should increase monetary value? What would this lead to?
By reducing its supply
Falling prices
What 2 ways can monetarism be successfully achieved?
Reduced government spending
Increasing interest rates to deter from credit
What 2 ways was monetarism applied?
Increasing interest rates
Supplying less money
What is a human cost as a result of monetarism? What happened to weaker firms that couldn’t borrow money?
Unemployment
They went bankrupt
What was the rate of inflation in 1979? How much in 1983?
19%
5%
What economic factor rose in Thatcher’s first years? How many people suffered?
Unemployment
1 million
What unrest was present as a result of unemployment? What took place in cities?
Social unrest
Riots
What had Thatcher’s first year been characterised by economically? What had the government granted for steel workers and miners?
U-turns
High pay rises
What nationalised car manufacturer was subsidised? How much had they seen inflation rise to?
British Leyland
19%
How did many people feel about Thatcher’s government economically in the first year? What did many feel about her policies?
It would go the same way as Heath’s government
They were failing
What dichotomy was present in the cabinet? What was this based on?
“Dries” and “wets”
Support
What policies did Thatcher assert would continue at the 1980 Tory conference? What did she famously say?
Monetarist policies
“U-turn if you want to; the lady’s not for turning”
Who introduced a monetarist budget in 1981? How much money was taken out of the economy?
Chancellor Geoffrey Howe
£4 billion
