Economic Change

Question 1

Why was there a postwar depression

Answer 1

Postwar production was too high so prices fell, many farmers had to sack workers. Old industries were in decline. Republican government believed in laissez-faire policy and didn’t try to stop the depression, they did introduce tariffs but they were just reacted to with Tariffs so exports fell

Question 2

How did the introduction of specialisation cause a boom

Answer 2

The mass production techniques specialisation and prices could drop because business costs for help. This increased demand for manufactured goods. In 1917 4 million cars registered, by 1929 23 million cars registered.

Question 3

How did new management techniques cause a boom

Answer 3

New scientific management techniques increased wages and better working conditions therefore causing labour productivity to increase.

Question 4

How did the government encourage people to buy American

Answer 4

By subsidising farmers and cutting business taxes

Question 5

What was higher purchase and why did this cause a boom

Answer 5

This was people buying things on credit and it meant people could buy more consumer goods, they also bought more homes and mortgages, all increasing confidence in the economy.

Question 6

Why did shares go into a boom cycle and what is this known as

Answer 6

In the 1920s prices of shares began to rise rapidly and the media began to point out that you could buy small number of shares and sell them straightaway and make a profit therefore ordinary people began buying and selling shares. This sent shares into a boom cycle known as a bull market.

Question 7

When was the Wall Street crash

Answer 7

October 1929

Question 8

Why did the Wall Street crash happen

Answer 8

Investors felt the share prices were dangerously high therefore sold and kept the profit. Prices then continued to fall and a bear market replaced the bull market.

Question 9

What fraction of banks in operation before the crash then went bankrupt

Answer 9

One third

Question 10

What was Roosevelt’s first action to help recover the economy

Answer 10

He closed all banks, had the FED inspect them and only reopened the healthy ones

Question 11

How did Roosevelt increase confidence in the economy

Answer 11

Are used federal agencies to increase employment

Question 12

Why did consumer spending increase after World War II and what statistic shows the increase in production

Answer 12

After the war there was increased demand for goods that many consumers have gone without therefore demand rose dramatically. Production increased from 213 billion worth in 1945 to 284 billion worth in 1950

Question 13

How did Truman come down hard on strikes

Answer 13

When coal miners striked, Truman took over coalmines. When the rail workers striked, he took over the railways. When rail workers walked out he asked Congress to draft strikers into the army, they quickly back down.

Question 14

What statistic shows the post well baby boom

Answer 14

1947 nappy cells were $32 million by 1957 this was $50 million

Question 15

How did the government provide support for those leaving the military after World War II

Answer 15

Those leaving the military got a leaving payment, unemployment payment for a year, loans to buy homes and medical and healthcare

Question 16

Why did farmers continue to manage after World War II

Answer 16

The government continued subsidies and demand increased

Question 17

What control prices during the war and when did it shut down

Answer 17

The OPA control prices but they shut down in 1946

Question 18

Why did prices increase after the war and by how much

Answer 18

Following the war farmers and businesses wanted to exploit the demand for goods and food, and prices jumped 25% in two weeks

Question 19

How did the Fed steady inflation

Answer 19

They put controls in the money supply

Question 20

Why did the suburbs start to develop

Answer 20

Factories colleges and universities moved outside the cities where there was more land the government also funded the building of roads and homes, the 1965 highways act built 41,000 miles of interstate highway.

Question 21

What will Levitt towns

Answer 21

These were towns in which the houses were mass produced prefabricated cheap housing built by the Levitt company. However they refuse black Americans

Question 22

The USA designed the radio but how did Japan change that

Answer 22

They miniaturised and improved it. By 1958 there were 45 million radios in the USA

Question 23

Why did people move to the Sunbelt and how did this affect cities

Answer 23

People attracted to the Sunbelt because land goods and labour were cheaper so there was a significant shift in industry, good air-conditioning also made this area more attractive. This drained the city of labour and resources

Question 24

Why was there a downturn in the economy in the 1960s

Answer 24

Because the USA lost its place is the most important exporter due to a drain on finances from the Vietnam war. Therefore in order to balance the gold reserves and paper money the government slowed increasing the money supply which cause the downturn in the economy

Question 25

What are the four main challenges of the 1970s

Answer 25

Stagflation, energy problems, government action, the confidence crisis.

Question 26

Why did stagflation occur

Answer 26

Because of the shift in the USA world position and exports fell however business taxes and costs continue to rose

Question 27

In 1953 what was the USA share of world exports and what is this fall to 1973

Answer 27

29% and it fell to 13%

Question 28

When will the two fuel crisis

Answer 28

1973 and 1979

Question 29

What caused the fuel crisis in 1973

Answer 29

During the Arab-Israeli war OPEC supported Palestine therefore they put the prices up by 70% for countries supporting Israel and kept prices high even after the war. By January 1974, world oil prices were four times higher than before the crisis

Question 30

When was the second fuel shortage

Answer 30

From May to July in 1979

Question 31

What was the main consequence of the two fuel shortages

Answer 31

It caused great discontent with the government and also meant a lot of people change cars to smaller and more efficient Japanese and European cars

Question 32

Why did federal spending increased during the 1970s

Answer 32

Because Social Security payments and pensions were linked to the consumer price index and inflation was rising

Question 33

How did the end of the Vietnam war increased government spending

Answer 33

Because more soldiers were claiming social and medical benefits

Question 34

What was unemployment in 1978 and what did it rise to a 1979

Answer 34

5.8% in 1978 rose to 7.1% in 1979

Question 35

What President Carter called the challenge of the 1970s

Answer 35

Confidence in crisis