Topic 4 - Changing Quality of Life (BOOM TO BUST)

Question 1

economy in 1917

Answer 1

• US enters FWW during which US economy gains a great boost
• profound boost selling armament to allies
• sinking of the Lusitania - problems between US and Germany
• smaller direct involvement meant profit
• when war ended some economic difficulties - jobs ended and no European trade market - red scare - workers rights - Wilson

Question 2

economy 1918 to 1929

Answer 2

• Republicans resort to isolationist policies
• followed by great boom of 20s
• enjoying life despite prohibition
• white middle class thriving
• minorities perhaps still finding their feet

Question 3

economy in 1929

Answer 3

• WALL STREET CRASH :(
• led to global depression
• bubble burst - USA forced to take stock
• Hoover tried to fix things and failed

Question 4

economy in the 30s

Answer 4

• 1933 FDR now pres and his New Deal greatly helped economic recovery
• alphabet agencies
• confidence back up
• Second New Deal included the Wagner- Steagall National Housing Act to clear sums and build almost 1 mil houses for low income people - clear Hoovervilles

Question 5

economy in the 40s

Answer 5

• 1941 Pearl Harbour - US in SWW which became second most important reason they recovered from GD
• Bretton Woods agreement signed which made the US dollar the currency to be backed by the gold reserve
• most pure and trusted currency in the world prior to the pound
• back up rise of US - prove how far they have come
• important in international scene
• sleeping giant to world superpower
• not just economic but political powerhouse
• new deal good by SWW changed things

Question 6

what did Truman pass in late 40s to aid the economy

Answer 6

• 1946 - Employment Act created a council of economic advisers to assist the president
• need to balance out economy as some people like minorities lagged behind
• 1949 Truman’s Housing Act as part of his fair deal policies

Question 7

discuss the economic cycle

Answer 7

• unrealistic confidence (bandwagon)
• realisation this is unsustainable and everyone is in trouble
• uncertainty - where are we
• panic
• realignment of expectations based on fact
• confidence based on fact and hope

Question 8

discuss how the stock market works

Answer 8

• new company people invest - price high
• smart people realise the company is bad and sell when price is high for profit
• people copy
• shares cheap people buy

Question 9

how did the stock market crash in 1929

Answer 9

• companies put themselves on stock market
• investors buy
• this happened on mass scale in 20s
• but because people were spending - had money, loans and credit - and value of companies always going up people who didn’t really understand the stock market where drawn in
• people that make their fortune buy and sell at the right time
• 1929 - too many unsustainable investments at once so it crashed
• many people couldn’t get out at the right time and had bought their stocks on credit
• bought on the margin

Question 10

what was the economic impact of the FWW

Answer 10

• FWW increased demands of US production capacity not just in supplying allies but also home consumption after April 1917
• farming and industry boomed
• many farms/factories introduced mechanisation to meet rising demands
• after the war this meant fewer jobs tho and thus rising unemployment
• farmers also over producing after war which lowered prices and profits
• post war economic depression
• newly elected Repub gov believed in laissez faire saying depression would right itself and it did
• isolationist tariffs e.g. meant reduced exports but did encourage American buying

Question 11

what was problematic about the 1920s

Answer 11

• it was built on loans and credit

- made people want to immigrate to USA

Question 12

what is Taylorism

Answer 12

• mass- production
• reducing manufacturing into a series of steps and making one worker responsible for each step in the process
• specialising in one role

Question 13

what is Fordism

Answer 13

• mechanisation by moving assembly line

Question 14

what was the impact of combining Fordism and Taylorism

Answer 14

• created the perfect efficient process to maximise car output and thus profit
• more profit meant that prices could be lowered to increase sales and leave people with the necessary money for fuel and maintenance
• everyone was happy

Question 15

give 5 manufacturing factors that led to the boom time of the 1920s

Answer 15

• mass-production (Fordism and Taylorism)
• new management techniques
• federal policies
• hire purchase
• changing industry

Question 16

how did new management techniques contribute to the boom period of the 1920s

Answer 16

• ideas from Fredrick Taylor about scientific management
• encouraged the payment of good wages and maintaining good working conditions in the hope contented workers would produce more goods

Question 17

how did federal policies lead to the boom time of the 1920s

Answer 17

• although the Republican government preferred to avoid interreference in business, it did keep some of the wartime subsidies in place
• cut taxes for businesses to encourage consumers to buy American
• Republicans championed American businesses

Question 18

discuss how Hire Purchase and Loans (HP) lead to the boom time of the 1920s

Answer 18

• before war borrowing money was seen as a last resort but in 1920s people were encouraged to buy now pay later
• by 1929 the average consumer was borrowing around 10% of the annual income
• good only in moderation with regulation

Question 19

discuss how changing industry led to the boom time of the 1920s

Answer 19

• new industries were more efficient and used higher levels of mechanisation
• there was also a shift away from the staple industries (textiles, ship-building, coal and steel) towards consumer good production

Question 20

what is the Bull market

Answer 20

• when everyone wants to buy and throw their money at a market charging head first into the stock market
• spending savings and buying stocks

Question 21

what is the Bear market

Answer 21

• people scared of bears like they were scared to invest

- what is was after 1929 crash

Question 22

discuss what buying on the margin led to

Answer 22

• 1920 price of shared in new modernises industries rose rapidly
• where before share trading had been the domain of banks and rich people now everyone wanted to cash in on the money to be made in buying and selling shares
• shares went into boom cycle/bull market
• media played a part in raising awareness of the money that could be made on stock market
• people believed it was a sure thing to reap profits from stock buying
• many got loans to do so - buy on margin
• gov did nothing to regulate it and what goes up must come down

Question 23

give some of the impacts of the Great Depression

Answer 23

• bankruptcy for many businesses
• banks failed
• extreme unemployment
• people lost homes when couldn’t pay mortgage
• people stopped buying which meant prices fell and more businesses failed
• republicans did little so out goes Hoover and FDR left to fix it all
• FDR ran out huge gov debt to fund his New Deal
• can’t pay workers
• private banks meant no other branches to help
• banks couldn’t give people their savings - panic and riots

Question 24

discuss some good stuff FDR and his New Deal did for the economy

Answer 24

• closed banks for a short period
• promised prosperity whatever it takes
• alphabet agencies
• banking acts to regulate
• pension schemes
• social and financial security
• Frances Perkins

Question 25

what was the impact of the SWW on the US economy in comparison to the FWW

Answer 25

• massively expanded it

- no post war depression this time

Question 26

why did the US economy continue to boom after the SWW

Answer 26

• industry was easily transformed from war production back to consumer goods
• increased wages encouraged spending - increased demand - people worked during the war but had nothing to spend money on
• post war baby boom increased demand and over LT as they turned into teens
• farmers boomed - demand for home produce increased as population grew as did overseas demand
• Truman took hard line against Unions and Strikes
• Truman’s fair deal increased gov spending but advanced welfare, education, housing which all increased employment

Question 27

what was Consumerism

Answer 27

• positively patriotic (anti-communist) - the American way

Question 28

what did Truman take a stance against after the SWW which contributed to the boom

Answer 28

• took a hard line against Unions and strikes
• in coal and rail industries e.g. strikes led the government to nationalise the industry
• tried to stop another red scare which was ironic as one happened anyway

Question 29

what factors can you consider for the question:

“was the SWW the main reason for post-war affluence in the 1950s”

Answer 29

• presidency
• confidence in the pres and american ideals
• post war baby boom and its relationship to the war
• new suburbs
• USA great industrial capacity
• great confidence generated by America’s superpower status following victory in the SWW

Question 30

discuss aviation after the SWW

Answer 30

• SWW had significantly advanced aviation tech so in post war period new civilian airlines greatly advanced business opportunities and employment
• prove how far America had come and how things had improved economically/industrially
• FWW when aviation first began
• tourism
• trade

Question 31

Bretton Woods Agreement 1944

Answer 31

• another impact of SWW was the on the international market the Dollar became the primary currency to be backed by a gold reserve
• USA’s gold depository had moved to Fort Knox in 1937 and became the stuff of legend thereafter
• safe and securest currency in the world
• all other currencies weighted against it
• precious commodity
• never lose value

Question 32

discuss the introduction of the Levittown

Answer 32

• brought assembly line construction concepts to housing and created the American suburb
• new lifestyle for people who could afford it
• wouldn’t sell to AA
• change the economic spectrum for a lot of people
• sign of success for America - cars - idyllic lifestyle
• teens grow up there and spend money
• JFK brings housing act in early 60s but in 50s impossible to live in suburbs unless white

Question 33

what is the problem with constant buoyancy in the economy

Answer 33

inflation

• high inflation is when prices rises faster than wages - this is when governments are keen to intervene in the market economy
• artificial inflation is when businesses know people like their products so start to creep up the prices - taking advantage makes people start buying overseas

Question 34

what are the traditional methods to tackle inflation

Answer 34

• raise taxes so people spend less
• increase government spending
• increase supply of money which also helps with welfare expense
• tricky because you don’t want people to stop spending money otherwise businesses fail and raising taxes can lose you an election

Question 35

who was tasked with tackling inflation

Answer 35

the Federal Reserve Board

Question 36

discuss the economy in the 60s as inflation rose

Answer 36

• with welfare high and cold war costing billions the constant increase in supply of money led to a downturn in the economy
• the dollar was no longer satisfactorily balanced on the Gold Standard
• meant USA entering a period of Stagflation - businesses stagnate but inflation carries on rising
• gov spending more than they can maintain - GS and war was huge strain

Question 37

overall view of 50s

Answer 37

• good
• couple of hiccups with second red scare and Korea
• perhaps too much confidence

Question 38

in depth view of the 50s how did it go from boom to stagflation

Answer 38

• 50s arguably America’s greatest decade at least in terms of optimism, wealth, and the USA’s sense of power on the international stage
• the boom had to end tho
• tho more people spending more on consumer goods many of goods not from America
• while USA basked in 50s glory its previous enemies Japan and Germany were expanding their economies to become rival economic powerhouses
• new communist enemies USSR and China also attempting to outproduce the USA
• growing dependence on gov - war - poverty - overseas competition
• Japanese cars more economical
• European appliances cheaper

Question 39

discuss the economic crisis of the 70s

Answer 39

• federal gov struggled to cope with it
• although end of V war saved money, welfare spending at an all time high
• confidence in executive at an all time low
• fuel shortages of 1973 and 79
• by 1974 fuel was 4x price it had been and never returned to earlier levels
• people stopped buying American gas guzzling cars and bought economical ones from overseas
• people stop spending to be careful - suburbia meant they needed to afford oil to commute to work
• businesses struggle and people get laid off

Question 40

what are three points of discussion for 70s

Answer 40

• Cronkite
• media
• portrayal of President’s

Question 41

discuss ford and the economy

Answer 41

• V war brought to humiliating end
• domestically he presided over worst economy in the four decades since GD
• growing inflation and recession
• controversially pardoned Nixon
• yo-yo taxes
• didn’t help economy
• oil crisis

Question 42

discuss carter and the economy

Answer 42

• in attempt to restore confidence he addressed nation in fireside chat style thing to discuss energy crisis
• said facing biggest confidence crisis
• failed at ending stagflation and fixing economy
• methods to resort to austerity - spending cuts and tax increases to balance the budget which made him unpopular
• homelessness and unemployment levels reminded people of GD
• instead of solving oil crisis he told people to wear a jumper
• Iranian hostage scandal