The Lawson boom Flashcards
supply side economics benefit businesses as it encouraged
Deregulation for business(+ low taxes) encouraging enterprise + entrepreneurship
supply side economics support for business labour
Flexible labour makes it easier to hire + fire workers
what did low taxation part of supply side economics encourage?
Employees spend on goods and services(encouraged by low taxation)
supply side economics meant businesses could?
make profit
what do profits encourage?
profits encourage expansion/investment into business
between 1985-1988 UK economic growth was ?
well above the long run trend of 2.5%
however by 1990 inflation had?
increased to 9.5%
Lawson boom of the late 1980s was a classic example of?
a ‘boom and bust’ economic cycle
the late 1980s period of rapid economic expansion was caused by?
rising house prices, tax cuts + lower interest rates and high confidence
however what did the boom also cause?
a rise in inflation + large current account deficit
policies to tackle this inflation caused?
the recession of 1991-92
Lawson boom followed from the recession of 1981, what did this recession particularly affect?
the manufacturing sector + caused unemployment to rise to 3 million
by 1985 unemployment was still over?
2.5 million people
from 1986 the gov made various decisions to?
inflate the economy causing an inflationary boom
who was the chancellor of the exchequer from 5 may 1979
Sir Geoffrey Howe
who was the chancellor of the exchequer from 11 June 1983
Nigel Lawson
who was the chancellor of the exchequer from 26 October 1989
John Major
