How Did The Economic Environment Change Between 1917-80?

Question 1

Post war depression effects on farming, industry and govt reaction

Answer 1

Farming: mechanism, over production, Boll Weevil
Industry: strikes
Govt reaction: laissez faire, republican presidents

Question 2

Pre war ‘boom’ industry Ford motors

Answer 2

Production/ assembly lines reduced price of model T ford
Ford’s ‘scientific management’: 1 task given to specific worker/ group instead of a specialist
Psychologically damaging: pay rise

Question 3

Pre war boom hire purchase

Answer 3

People could pay for goods in a series of payments
Positive effect on industry and encouraged a sense of prosperity
More bought homes and farms on mortgages

Question 4

The stock market, dividend

Answer 4

Regular payments made by companies to shareholders

As share prices rose more rapidly, media suggest $ to be made buying and selling

Question 5

What happened to shares as they boomed

Answer 5

Own boom cycle- ‘bull market’
People buy shares with burrowed $ to sell at a quick profit: ‘buying on the margin’
Bear market: price of shares fall and people expect to continue

Question 6

What caused the Bust in the 1930s?

Answer 6

Overproduction matched by a drop in demand
Federal policies and tariffs
Farmers and ethnic minorities didn’t benefit from the boom

Question 7

Key events and policies of the Roosevelt years

Answer 7

Closing banks, success hampered by natural disasters 
1937 Fed Housing Administration 
1938-39 Roosevelt Recession 
Agricultural Adjustment Act est 1933 
Ww2 production 1939

Question 8

Unemployment figures of the 1930s

Answer 8

In the worst years of 1932 and 33 25% of the work force was unemployed

Question 9

WW2 affluence- ‘business boom’

Answer 9

Employers encouraged to expand workforces and increase pay

Huge demand for consumer goods as production increased, low unemployment

Question 10

Post war affluence govt action

Answer 10

Govt came down hard on strikes
Spending rose steadily; Truman ‘Fair Deal’ support for those leaving military service
Increased security benefits
Built 810,000 low income homes

Question 11

Post war ‘baby boom’

Answer 11

Growing demand for child centred goods and food stuffs, more toddlers and teens to come: required schools and colleges, become consumers

Question 12

Post war boom effect on farmers

Answer 12

Managed to do well: demand for farm produce in US

Question 13

Inflation and growing affluence

Answer 13

Prices rose, sometimes faster than wages
Buying on credit rising: inflation not down until 50s
Federation puts control on money supply: amount of money circulating country, govt impact by printing $

Question 14

OPA in inflation and growing affluence

Answer 14

Govts Office of Price Administration had controlled prices during war
Shut down in 1946: farmers and business men want to exploit demand and prices jump 25% in 2 weeks- initial jump and then rose steadily

Question 15

1946 Employment Act

Answer 15

Instated a Council of Economic Advisors (CEA) to advise country’s management; President has to give a strategy report to a Joint Economic Committee of the House of Representatives and Senate after each federal budget

Question 16

Economy of the 1950s- baby boom

Answer 16

‘Baby boom’ fuelled by men working, fewer women working and buoyant economy

Question 17

1950s economy

Answer 17

Sometimes inflation and unemployment increased sharply for a year
People always left out of affluence
Leave inner cities (dangerous, slum): growth in suburbs

Question 18

Consumerism in the 1950s

Answer 18

People confident of ‘the American way’ and consumerism seen as patriotic
Consumer confidence vital in the growth of the economy- hid economy’s underlying problems

Question 19

The suburbs of the 50s

Answer 19

Visible signs of change
Factories, colleges and unis moved outside of city
Gov’t funded building of roads and homes eg 1956 Highways Act
Building of black suburbs
Cheaper homes: could afford cars and mortgage from banks

Question 20

Levitt

Answer 20

Specialist building company 
Mass produced, prefabricated homes 
Quick, easy and cheap- inspired by military industrial building 
Explosion of 'Levittowns' in NEast 
Refused to sell to BA

Question 21

Technological advancement of US

Answer 21

End of 50s: US losing place as the country of technological advancement and hold of world markets: shift in where goods came from
Unlike US, Japan improved and miniaturised the transistor radio- US had to buy parts

Question 22

Shift in industry

Answer 22

From the north and east towards south and west

Question 23

Why did industry shift?

Answer 23

Largely due to wartime investment for war production industry; air craft manufacture and military bases, land goods and services cheaper in S+W- military bases stayed and new factories produced peace time goods

Question 24

Pre vs post war thinking

Answer 24

Pre war economic thinking: high govt spending (even if budget deficit was caused) would keep the economy stable- didn’t work after WWII
Govt wanted to keep interest rate low so increased the money supply

Question 25

1960s economy

Answer 25

US lost place as worlds most important exporter
Vietnam drains govt financed and social welfare payments
Balance of gold and paper money uneven- amount of gold kept falling

Question 26

1960s govt economic policy

Answer 26

Govt increased money supply but inflation still rose- helped to meet increasing welfare costs and other bills
Short term helped economy