the gold standard

Question 1

what is the gold standard

Answer 1

-monetary system money is backed by gold
-gold standard sets a fixed price gold and buys and sells gold at that price
-britain on gold industry in 19th century

Question 2

why did britain return to gold standard after ww1

Answer 2

-economic problems after ww1
-churchill appointed as chancellor by Baldwin, believed it would bring Econ to pre war strength
-would control inflation and create stability for export industries

Question 3

problems with gold standard

Answer 3

-chruchill opted for pre-war value of 4.86
-seen as 10% too high
-overvalue pound= British exports expensive and uncompetitive
-unemployment grew and wages fell in staple industries

Question 4

the general strike

Answer 4

-mining industry struggling and hit hard by gold standard
-1926, miners led general strike: partially due to gold standard

Question 5

gold standard and interest rates

Answer 5

-to maintain, interest rates had to be kept high to encourage foreign investment
-without foreign money, gold reserves depleted
-discouraged borrowing and prevented innovation

Question 6

deficits and the gold standard

Answer 6

-had to ensure no deficit as it would destroy confidence of investors
-government limited n spending to help deal w consequences of Econ depression

Question 7

gold standard 1931

Answer 7

-banking crisis led to removal by Ramsey Macdonald
-questions over why is had not been removed
-chruchill admitted it was a mistake