Balance Of Payments Issues

Question 1

What was the balance of payments crisis?

Answer 1

-economic picture not as positive as growth in affluence suggested
-growth in wages outstripping rate of increase in production + this brought inflation
-cons govt faced with task of how to maintain growth + employment at same time as keeping prices steady
-Mac’s answer lately an appeal to industry + public — “what we need is restraint + common sense”

Question 2

Why was stop-go introduced

Answer 2

-difficult persuade unions that members not have night wage increases — coal miners felt not gaining as much as other industrial workers
-govt controls curb excessive inflation + taxation remained high — to control excessive spending that led to unwanted imports increase + pay for rising public service costs