chapter 2

Question 1

why was the post-war consensus needed

Answer 1

fear from the great depression of the 30s and great wars that more economic trouble would follow

Question 2

when did food rationing end

Answer 2

july 1954

Question 3

how many were unemployed in 1955

Answer 3

200,000 or less than 1% of the workforce

Question 4

which working areas saw economic/employment growth

Answer 4

steel, cars, engineering & services

Question 5

why was there a growth in income and what did it create

Answer 5

-economic growth and low unemployment caused real wages to rise
-affluence and consumerism

Question 6

which economic area did uk globally top

Answer 6

-higher income per head than any other major country exc. USA
-did not necessarily top in any other industrial growth rates

Question 7

what unstable economic system was used and why

Answer 7

-stop-go economics
-economy was in danger of overheating as consumerism outsold production

Question 8

how do stop-go economics work

Answer 8

-high interest rates to stop spending and lower demands
-output decreases and interest drops
-demand increases & imports rise
-imports exceed exports on balance of payments
-repeat

Question 9

what economic trouble did the suez crisis create

Answer 9

-‘run on the pound’
a rapid fall in the value of the pound in international currency markets

Question 10

why were stop-go economics an issue

Answer 10

-unpredictable and hard to manage in something eg. rotp.
-not long term
-causes arguments within the party

Question 11

what is an example that the economy had grown by 1959

Answer 11

-april tax cuts of £370million
-probably why macmillan was re-elected in october

Question 12

when did the economy hit its peak?

Answer 12

-1960-64

Question 13

what is the ‘pay pause’ of 1961

Answer 13

-worried about the economy overheating
-hold down wage inflation and ask for a loan from IMF
-again, balance of payments and stop-go caused this.

Question 14

what was an issue that caused the desire to be in the eec

Answer 14

-clear that britain was falling behind europe’s economy - especially west germany
-macmillan decides its essential to join economy with europe

Question 15

what was the reaction to being rejected from the eec

Answer 15

-1963
-shows extent of failure to modernise economically
-cut backs in public expenditure. eg. closing 30% of the railnetwork & many rural areas were left isolated

Question 16

why was britain rejected from the eec

Answer 16

-other countries accepted the application but french president DeGaulle rejected as britain was a liability

Question 17

what were the growth and export rates of the early 60s

Answer 17

4% 1963
6% 1964
exports rose 10% 1961-64 but imports remained 20% higher

Question 18

synopsise the economics of the 50s

Answer 18

satisfied population as real wages and spending remained high
weak economy based on unstable stop-go method, also backwards as not accepted to EEC