Economic Developments: Inflation from 1979-1990

Question 1

What did the Conservatives use in Thatchers’ first term to control inflation?

Answer 1

Monetarism

Question 2

What would happen with interest rates under Monetarism? How would it reduce inflation?

Answer 2

They would be put up heavily, to discourage spending

Question 3

What were interest rates up to by the end of 1979?

Answer 3

17%

Question 4

What was a negative impact for entrepreneurs of high interest rates?

Answer 4

They were less able to grow their businesses

Question 5

What was a disadvantage for British exportation of goods from high interest rates?

Answer 5

It meant British businesses were less able to sell their goods to other countries

Question 6

What was inflation at in 1979?

Answer 6

11%

Question 7

What was inflation at in 1980?

Answer 7

22%

Question 8

What was inflation averaging a year from 1983 onwards?

Answer 8

4.5% a year

Question 9

How low was inflation in 1986?

Answer 9

2.5%

Question 10

What did Britain join in October 1990 that increased inflation?

Answer 10

The European Rate Mechanism (ERM)

Question 11

What budget created inflation from 1987-1990?

Answer 11

Nigel Lawson’s Credit Boom Budget

Question 12

What was inflation at by the end of Thatcher’s third term?

Answer 12

10.6%