Impact of Economic Change 1917-1980

Question 1

Which 2 areas of the economy contributed to a post WW1 depression

Answer 1

• Farming
• Industry

Question 2

Why did the farming sector suffer after the end of WW1

Answer 2

During the war, farmers were subsidised to grow wheat, but wheat demand fell after the war, making wheat overproduced, dropping prices for wheat farmers bankrupting many

Question 3

Why did industry suffer after the end of WW1

Answer 3

• Post-war strikes across 1919-1920 led to business failure and therefore unemployment
• Many older industries like coal lost demand
• Demand for extra goods during WW1 reduced after the war

Question 4

How did the government response to the post-WW1 depression improve or worsen the recession

Answer 4

They had a laissez-faire attitude so did nothing to intervene during the depression, not helping many people who were struggling. Their isolationist ideas also meant there were more tariffs which reduced American exports so businesses suffered too.

Despite this, the economy eventually adjusted and corrected itself

Question 5

How did the government response to the post-WW1 depression influence government thinking at the start of the Great Depression

Answer 5

They believed a Laissez-Faire attitude would work for the Great Depression which severely backfired

Question 6

Give an example of the advancements of mass production post WW1

Answer 6

Ford catalysed mass production advancements

1917: 4.7 million passenger cars
1929: 23.1 million passenger cars

Question 7

How did the government contribute to the economic boom of the 1920s

Answer 7

Despite their Laissez-Faire attitudes they kept wartime subsidies to encouraging ‘buying American’

Question 8

In 1920 and 1929, the average American borrowed _% of their income

Answer 8

1920: 5%
1929: 9%

Question 9

What catalysed the growth of new industries in the 1920s

Answer 9

The growth of the electrical grid

Question 10

In 1917 vs 1930, how many buildings had electrical wiring

Answer 10

1917 - 7.9 million
1930 - 24.6 million

Question 11

What strategy did Americans use to turn quick profits in the 1920s and why did this work

Answer 11

‘buying on the margin’ - buying shares with borrowed money to sell quickly at a profit

This worked as the economic boom meant share prices were almost always rising (a bull market)

Question 12

When did the Wall Street Crash occur

Answer 12

29th October 1929

Question 13

How did the government initially react to the Wall Street Crash

Answer 13

They tried to maintain a ‘Laissez Faire’ attitude but it only worsened the situation

Question 14

About what % of all banks opened before the wall street crash were closed by 1933

Answer 14

33%

Question 15

Why did Hoover not implement change in the Great Depression

Answer 15

He was largely blocked by his Republican Congress who refused to implement changes

Question 16

What was Roosevelt’s first action as President

Answer 16

Closed all the banks and had them inspected by the Federal Reserve Board, only opening up the ‘healthy’ ones

Question 17

What two acts in 1937 and 1938 showed the USA was recovering its production and economy

Answer 17

1937: Wagner-Steagall National Housing Act: Cleared slums largely created during the Great Depression and replaced it with low-income housing

1938: Second Agricultural Adjustment Act: Subsidised farmers to produce less to help increase crop prices

Question 18

Unemployment rate in the following years:

1929:
1933:
1941:

Answer 18

1929: 3.2%
1933: 24.9%
1941: 9.9%

Question 19

Government spending in the following years:

1930:
1933:
1941:

Answer 19

1930: $3.3 billion
1933: $2 billion
1941: $8.7 billion

Question 20

Total shares traded in the following years:

1920:
1929:
1940:

Answer 20

1920: 227 million
1929: 1.125 billion
1940: 208 million

Question 21

Production increased following WW2 from what in 1945 to what in 1950

Answer 21

1945: $213 billion worth of goods
1950: $284 billion worth

Question 22

How did governments treat worker strikes after WW2 (3 examples)

Answer 22

They cracked down in a bid to improve the economy by increasing the prices without increasing the wages

• Truman took over coal mines after coal miners went on strikes
• Truman took over railways after railway workers went on strike to support the miners
• When rail workers walked out of work in protest, Truman asked Congress to draft them into the army

Question 22

3 facts suggesting a baby boom in the USA

Answer 22

Nappy Sales:
1947: $32 million
1957: $50 million

Toy Manufacturing:
1959: $1.6 billion
1961: $2 billion

Live Births:
1940: 2.56 million
1955: 4.1 million

Question 23

What act built 810,000 affordable housing projects after WW2

Answer 23

1949 National Housing Act

Question 24

What governing body kept prices down during WW2 and when it was shut down what did prices jump by in 2 weeks Why was this not a major problem

Answer 24

OPA (Office of Price Administration) Upon closing in 1946 prices jumped by 25% in two weeks but prices settled after that and the economy adjusted

Question 25

What 1956 act allowed for easier development of suburbs

Answer 25

1956 Highways Act - built 41,000 miles of interstate highways

Question 26

Which company became known for their ability to build suburbs quickly and cheaply and what did these suburbs become known as

Answer 26

The Levitt Company - Made Levittowns

Question 27

Give an example of a Levittown, including its size and house cost

Answer 27

Levittown, Long Island - Had 17,000 homes for 82,000 people, the cheapets of which cost $7,000

Question 28

How did Levittowns increase segregation

Answer 28

The Levitt Company refused to sell to black people creating entirely white neighbourhoods and causing segregation

Question 29

What two major shifts in industry occurred in the USA in the 1950s

Answer 29

- The South and West grew in production as it was cheaper to maufacture there, leading to a decline in Northeastern factories - America's overall production was being replaced by countries like Japan who were able to make better and cheaper products than the USA

Question 30

Give an example of Japan impacting on US production in th 1950s

Answer 30

The Transistor Radio - Although the USA designed it, Japan had the technological advantage to make it improved and miniaturised, and the USA had to import Japanese parts By 1958, there were 45 million transistor radios the majority of which were Japanese

Question 31

What change to economic thinking occurred in the 1950s and 1960s and did it work

Answer 31

They increased the money supply to try and keep inflation down, it worked in the short term but caused future problems as the gold reserves fell

Question 32

What economic phenomenon did the USA experience in the 1970s and why

Answer 32

Stagflation - Decreasing wages AND increasing prices

Question 33

The USA's share of manufactured goods exports in: - 1953: - 1973: and what does this show

Answer 33

- 1953: 29% - 1973: 13% This shows that businesses in the USA were being outcompeted by foreign competitors like Germany and Japan

Question 34

How did conflict accelerate economic crisis in the 1970s

Answer 34

OPEC raised prices of oil by 70% and the embargoed oil trade to the USA following USA's support for Israel in the 1973 Arab-Israeli War By January 1974, global oil prices were 4x higher than before the war, sparking a fuel crisis

Question 35

2 impacts of the fuel crisis on the USA

Answer 35

- Contribute to the rise unemployment from 5.8% - 7.1% in 1978-1979 - Led to a sharp decline in the American car industry as people favoured Japanese or European cars which used less fuel

Question 36

What did the economic issues in the 1970s mean for the US public

Answer 36

They wanted change and voted in Reagan to find change

Question 37

How much money did Hoover spend and borrow in the last year of his presidency and what did it symbolise?

Answer 37

He spent $2 billion and borrowed $3 billion and it symbolised the end of Laissez-Faire.