The economy (T3)

Question 1

What did Churchill do in order to help the govt. be more active in the economy?

Answer 1

He created many more ministries to help manage the economy

Question 2

When was registration for employment made law?

Answer 2

1941

Question 3

How many work orders were issued?

Answer 3

8.5 million

Question 4

How many people were involved in war work by 1945?

Answer 4

A third

Question 5

In 1951, what % of GDP was spent on defence?

Answer 5

10% (30% of govt. spending)

Question 6

How much money was loaned to Britain by the US and Canada?

Answer 6

£2.2 billion

Question 7

How much money did the Marshall plan give Britain?

Answer 7

£6 billion

Question 8

How much money did it cost Britain to finance the debt?

Answer 8

£4 billion

Question 9

What did the Atlee govt. do in order to finance the debt?

Answer 9

Cuts in govt. spending
Controlling private spending
Rationing of goods

Question 10

How much of the workforce was employed in nationalised industries by 1950?

Answer 10

10%

Question 11

How much did it cost the govt. to nationalise industries?

Answer 11

£2 billion to nationalise Coal, BoE, transport, electricity, gas, iron & steel.

Question 12

What did spending so much money on these industries mean?

Answer 12

There was very little money left to invest with.

Question 13

What was Butskellism?

Answer 13

A term used to describe the consensual approach to the economy by the Labour and Conservative parties

Question 14

How much did consumer spending rise by in the 50’s?

Answer 14

45%

Question 15

How did the increase in spending come about?

Answer 15

Borrow to spend

Question 16

What did the ‘borrow to spend’ mentality do for the economy?

Answer 16

• 4% growth in inflation

- Increase in imports –> imbalance of payments

Question 17

How did stop-go economics harm the economy?

Answer 17

Did not encourage foreign exports

Question 18

How large was economic growth in Britain compared to other countries?

Answer 18

2.3% a year compared to 5.6% in Italy and 5.1% in Germany

Question 19

What did NEDDY aim to do?

Answer 19

Aimed to produce reports for the future of the economy

Recommended pay freezes and tax increases (not popular)

Question 20

What was NICKY for?

Answer 20

An advisory body for unions and management. Tried to change wages. TU’s did not cooperate

Question 21

How was the move towards a more planned economy recieved?

Answer 21

Not well. considerable opposition from the Tories, Treasury & capitalist media.

Question 22

What was ‘Dash for growth’?

Answer 22

A demand management strategy that thought injecting high levels of demand would stimulate investment.

Question 23

Was ‘Dash for growth’ successful?

Answer 23

No. More demand = More imports = larger balance of payments deficit = less investment

Question 24

What is Stagflation?

Answer 24

When there is high interest and low productivity

Question 25

What were the key causes of stagflation?

Answer 25

- Increased consumer spending led to larger balance of payments defecit - Increased borrowing from IMF - Rising unemployment

Question 26

How did Wilson attempt to help the economy?

Answer 26

Attempted to invest in technology, but attempts failed due to continuing stagflation

Question 27

In 1967, what was the pound devalued to?

Answer 27

from $2.80 to $2.40

Question 28

How did Heath want to do to help the economy?

Answer 28

- Reduce govt. intervention - Cut state spending - More control of the unions

Question 29

Why did Heath's policy fail?

Answer 29

- Oil crisis - Inflation rose due to oil crisis - Rising unemployment - U-Turn - £2.5 billion pumped into economy

Question 30

What indicated the selsdon man approach had been abandoned?

Answer 30

The fact that £2.5 billion was pumped into economy, brought unemployment down to 550,000