Theme 1B- Changing Economic Landscape

Question 1

Impacts of WWI

Answer 1

Loss of trade, debt, devaluation, inflation, lack of modernisation

Question 2

What was the effect of war on inflation?

Answer 2

Rose to 25% in 1918

Question 3

What was the effect of war on national debt?

Answer 3

Britain spent £3 billion, were £8 billion in debt by 1920

Question 4

What was the state of the economy 1919-20?

Answer 4

Short post-war boom, demand increased for previously scarce goods

Question 5

What was the state of the economy 1920-21?

Answer 5

Severe recession, unemployment rose to 12% and wages failed to keep up with inflation

Question 6

What caused the recession post-1920?

Answer 6

Loss in trade, underinvestment in industry and increasing industrial unrest

Question 7

To what extent was recession limited in the 1920s?

Answer 7

Somewhat mitigated by spending cuts from 1922, but unemployment averaged 10%

Question 8

How were interest rates used to curb recession in the 1920s?

Answer 8

High interest rates to raise the value of the pound. but curbed economic growth as encouraged saving

Question 9

What was the effect of the 1925 return to the gold standard?

Answer 9

Returned pound to its pre-war value, disastrous for traditional industries as American trade became cheaper than Britain’s

Question 10

How were taxes used to curb recession in the 1920s?

Answer 10

Raised each year, £24 per capita in 1922

Question 11

How was spending used to curb inflation in the 1920s?

Answer 11

DLG appointed a Commission of National Expenditure, 1922 Geddes Axe

Question 12

What was the 1922 Geddes Axe?

Answer 12

Cut spending on education, pensions, unemployment and health by £24 million, and defence spending by £79 million

Question 13

What was the impact of the 1922 Geddes Axe?

Answer 13

Growing unemployment- never fell below 1 million during war years

Question 14

What were protectionist policies in the 1920s?

Answer 14

Tariffs introduced on imported goods to protect British traditional industries

Question 15

What was the effect of tariffs introduced in the 1920s?

Answer 15

Lack of modernisation, tariff walls in other countries. Industries that relied on exports suffered- by 1933 unemployment was 60% in shipbuilding areas and 49% in iron and steel industries

Question 16

How did trade unions grow in the 1920s?

Answer 16

1915-18 TU membership rose by 4 million, attempts at introducing pay cuts or longer working hours met with resistance. 323 strikes launched in 1926, including general strike

Question 17

What was the effect of the rise of trade unions?

Answer 17

Lack of wage flexibility- more had to be laid off. Halted progress of certain industries, as Britain couldn’t compete against countries with cheaper labour

Question 18

What was the state of the economy in the 1930s?

Answer 18

Depression, high unemployment- 25% in 1933

Question 19

How was unemployment distributed in the 1930s?

Answer 19

Areas centred on staple industries hit hardest eg coal in the north. London and the SE remained prosperous due to consumer industry

Question 20

What attempts to curb inflation were made prior to 1931?

Answer 20

Spending cuts and high interest rates- divided the Labour government

Question 21

What sparked the 1931 abandoning of the gold standard?

Answer 21

12,000 soldiers in Scotland mutiny in opposition to pay cuts.

Question 22

Impact of abandoning the gold standards?

Answer 22

Devaluation of the pound, quicker recovery, unemployment fell, cut in interest rates, cheaper exports and increased productivity