AP Success - AP European History: Thatcher's Economic Policies Impact
Margaret Thatcher, Speech to the Economic Club of New York, June 18, 1991"For most of the post War period the British economy had been in relative decline. Some argued that this was inevitable, that it reflected fundamental weaknesses in British society or even the British character. Government intervention was therefore regarded as the answer to these alleged weaknesses. It only slowly dawned on people that the exact opposite diagnosis was the correct one. Government was doing too much, and the wrong things. . . . So we also set out to create a framework favourable to enterprise: We cut penal rates of income tax and the tax on companies and we abolished some taxes altogether. We slashed burdensome regulations to encourage small businesses, the seedcorn of economic growth. We restored the balance in law both between trade unions and employers, and between unions and their members. . . We embarked on a vigorous programme of privatisation—forty-four major businesses so far—spreading ownership of capital and property ever more widely. These policies were dramatically successful. The performance of the British economy was transformed."
Question 1
According to Margaret Thatcher's speech, what was the initial public perception regarding the decline of the British economy post World War II?
The decline was attributed to external economic pressures from global markets.
It was believed that government intervention was necessary due to fundamental weaknesses in British society.
The decline was considered a temporary setback that would correct itself without government intervention.
The decline was seen as a result of Britain's focus on maintaining its empire.
Question 2
What does Margaret Thatcher identify as the 'correct diagnosis' for the British economy's issues?
The British economy was suffering from a lack of skilled labor.
There was a lack of government intervention in key economic sectors.
Government was overly involved and focused on the wrong areas.
The British character lacked the entrepreneurial spirit necessary for economic growth.
Question 3
Which of the following policies did Thatcher implement to address the economic issues she identified?
She reduced income and corporate taxes and abolished some taxes altogether.
She increased funding for social welfare programs to stimulate consumer spending.
She nationalized key industries to ensure stability and growth.
She implemented strict trade barriers to protect domestic industries.
Question 4
What was the primary goal of Thatcher's program of privatisation?
To spread ownership of capital and property more widely.
To dismantle the British welfare state entirely.
To increase government revenue through the sale of public assets.
To centralize economic control within the government.
Question 5
How did Thatcher's policies affect the balance of power between trade unions and employers according to her speech?
The balance in law was restored between trade unions and employers, and between unions and their members.
Trade unions gained significant power over employers and dictated employment terms.
The government took over the role of negotiating wages and conditions between unions and employers.
Employers were given unilateral power to set wages and employment conditions without union input.
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