Econ other Flashcards
What was the economic impact of the First World War on British trade?
Loss of trade due to British ships being occupied and sunk, leading to a decline in exports and loss of markets to rivals like the US and Japan.
Economic rivals filled the gap left by British exports, and countries at war with Britain became self-sufficient.
What was the total debt of Britain by 1920 due to WWI?
£8 billion, mainly owed to US banks.
The war cost Britain £3.25 billion.
What happened to the value of the pound during and after WWI?
The pound fell in value after Britain abandoned the gold standard in 1914, leading to inflation and a drop in its value.
In 1919, £1 was valued at $3.19.
What was the inflation rate in Britain in 1918?
25% inflation rate.
This significantly impacted prices.
How did technological development change during WWI?
Accelerated in medicine, transport, and radio, but Britain fell behind in industrial modernization compared to countries like France and Germany.
By 1918, Germany was producing twice as much steel as Britain.
How did the post-war boom in 1919-20 affect the economy?
It was fueled by increased demand for scarce goods, but was followed by a severe recession in 1920-21.
Unemployment rose to 12% of the working population.
What were the main causes of the recession in 1920-21?
- Loss of trade
- Underinvestment in traditional industries
- Declining industrial relations
What was the average unemployment rate during the limited recession from 1922?
10% unemployment rate.
Unemployment remained high despite spending cuts.
What was the impact of the Great Depression on Britain?
Trade collapsed and unemployment soared.
It hit Britain hard, with unemployment rising significantly.
True or False: High interest rates helped economic growth in Britain during the 1920s.
False. High interest rates curbed economic growth.
They made borrowing more expensive and encouraged saving over spending.
What was the Cunliffe Committee’s recommendation in 1919?
To return the pound to its pre-war value of $4.86 in 1925.
This decision proved disastrous for traditional industries.
What were the effects of the Geddes Axe in 1922?
Led to £24 million cuts in spending on various sectors including education and health.
Defence spending was also significantly reduced.
What economic policy was introduced to protect Britain’s traditional industries?
Protectionism, which involved duties and limited tariffs on foreign goods.
Although it provided short-term help, it discouraged long-term modernization.
What was the impact of trade unions in the 1920s?
Increased power and influence, leading to resistance against pay cuts and contributing to high unemployment.
Unemployment never fell below 1 million between the two world wars.
What does the term ‘the hungry thirties’ refer to?
A period of depression and high unemployment during the 1930s.
It was partly a political term used to criticize the Conservative Party.
What was the unemployment rate in Britain in 1933?
2.5 million, which was 25% of the workforce.
Higher unemployment was particularly noted in northern regions.
What event led to the devaluation of the pound in 1931?
The Great Depression, which caused a significant fall in exports and rising unemployment.
The pound depreciated from $4.80 to $3.40.
How did removing the pound from the Gold Standard in 1931 benefit Britain?
Allowed for quicker recovery from the depression, lowering unemployment and interest rates, and increasing exports.
Unemployment fell from 17% to 8.5% between 1932 and 1937.
What was the impact of austerity measures in the 1940s?
Led to public discontent, wage freezes, and ultimately the devaluation of the pound in 1949.
The measures included cuts in government spending and rationing.
What was the goal of nationalization under Attlee’s government?
To create full employment and manage key industries effectively.
It cost over £2 billion to nationalize key sectors.
What is ‘Butskellism’?
The economic approach of the 1950s and 1960s combining Labour’s welfare reforms and Conservative economic management.
The term is derived from the names of R. A. Butler and Hugh Gaitskell.
Fill in the blank: The 1950s saw a rise in consumer spending by _______.
45%.
This increase was based on borrowing.
What characterized ‘stop-go economics’?
Inconsistent economic policies where growth was encouraged followed by controls to curb inflation.
This approach demonstrated the difficulty in managing unemployment and inflation.
What was the aim of corporatism in the 1950s?
To unite labor, management, and government to plan and achieve economic goals.
It faced considerable opposition and was not successful.
