Chapter 2

Question 1

What period is referred to as the age of affluence in Britain?

Answer 1

The period from 1951 to 1964.

Question 2

What was a significant economic change in Britain after World War II?

Answer 2

Food rationing ended in 1954.

Question 3

What economic condition was achieved in Britain by 1955?

Answer 3

Full employment.

Question 4

What factors contributed to increased consumer goods purchases in Britain?

Answer 4

Increased wages and tax cuts.

Question 5

What was one effect of rising living standards in Britain during this period?

Answer 5

A growth in birth rates.

Question 6

What was the trend in industrial production in the UK from 1952 to 1959?

Answer 6

It increased but not as strongly as in other countries.

Question 7

What were the industrial production indices for the UK in 1952 and 1959?

Answer 7

1952: 101, 1959: 129.

Question 8

What economic issue arose from increased consumer demand in Britain?

Answer 8

A balance of payments problem.

Question 9

What could a balance of payments problem cause in Britain?

Answer 9

A run on the pound.

Question 10

What is the balance of visible trade for the UK from 1946-50?

Answer 10

-160

Question 11

What is the balance of invisible trade for the UK from 1946-50?

Answer 11

+104

Question 12

What is the overall trade balance for the UK from 1946-50?

Answer 12

-56

Question 13

What is the balance of visible trade for the UK from 1951-55?

Answer 13

-345

Question 14

What is the balance of invisible trade for the UK from 1951-55?

Answer 14

+326

Question 15

What is the overall trade balance for the UK from 1951-55?

Answer 15

-19

Question 16

What is the balance of visible trade for the UK from 1956-60?

Answer 16

-94

Question 17

What is the balance of invisible trade for the UK from 1956-60?

Answer 17

+223

Question 18

What is the overall trade balance for the UK from 1956-60?

Answer 18

+132

Question 19

What economic policy did the Conservative governments follow to manage the economy?

Answer 19

‘Stop-go’ economics

Question 20

What happened when the economy slowed down under ‘stop-go’ economics?

Answer 20

The government encouraged growth by lowering interest rates and allowing wages to rise.

Question 21

What happened when the economy overheated under ‘stop-go’ economics?

Answer 21

The government slowed the economy down by raising interest rates and controlling wage increases.

Question 22

What crisis demonstrated the weaknesses of the British economy in 1956?

Answer 22

The Suez crisis

Question 23

What alternative economic control did some Conservatives propose instead of ‘stop-go’?

Answer 23

Monetarism

Question 24

What was the consequence of limiting government spending under monetarism?

Answer 24

Cuts to house building, welfare, and public services.

Question 25

What was the economic outcome after the Suez crisis?

Answer 25

The British economy recovered quickly and sterling recovered against the US dollar.

Question 26

What significant action did the government take in 1959?

Answer 26

Made big tax cuts.

Question 27

What major financial action did the government take in 1961?

Answer 27

Applied to the International Monetary Fund for a loan.

Question 28

What was established in 1961 to plan economic growth?

Answer 28

The National Economic Development Council.

Question 29

What was established in 1962 to manage wages and prices?

Answer 29

The National Incomes Commission.

Question 30

What application did the government make by 1961 regarding Europe?

Answer 30

Application to join the EEC.

Question 31

What was the financial situation at the time of the general election in 1964?

Answer 31

There was a deficit of £800 million.

Question 32

What characterized the UK economy between 1951 and 1964?

Answer 32

A fast-growing economy with rising living standards.

Question 33

What were some underlying economic problems during this period?

Answer 33

Low productivity, recurring balance of payments issues, and inflation.

Question 34

Did the 'stop-go' policy solve all economic problems?

Answer 34

No, it did not solve all the problems.