chapter fourteen

Question 1

monetarism

Answer 1

an economic theory promoted by milton frieman/ the chicago school of economics

argued best way for government to control inflation was by restraint of government spending and borrowing and, above all, strict curbs on the money supply

Question 2

what did thatchers first budget in 1979 aim for

Answer 2

a reduction in government spending due to monetarist beleifs

Question 3

effect of the 1979 budget

Answer 3

a recession 1980
stagflation
wouldve likely led to a run on the pound (if north sea oil hadnt been discovered)

Question 4

inflation and unemployment 1980

Answer 4

inflation - 15%
unemployment - above 2 million

Question 5

what saved britain from economic crisis

Answer 5

the flow of north sea oil and gas

Question 6

1981 budget under thatcher

Answer 6

despite disastrous economic effect of the first monetarist budget, thatcher applied even more monetarist policies

government borrowing decreased further
grants to local councils cut
benefits frozen
lower taxation (shift fromn direct to indirect taxation)

Question 7

top rate of income tax 1974 versus 1988

Answer 7

83% versus 40%

Question 8

thatchers privatisations 1979-83 with dates

Answer 8

british petroleum - 1979
british aerospace - 1981
cable & wireless - 1981
britoil - 1982
british ports - 1983