Question: What was the impact of the Great Depression on USA? Explain
- With the fall in prices and the prospect of a depression, the US banks also slashed domestic lending, and called back loans.
- Farms were unable to sell their harvests.
- Faced with falling income, many households in the US could not repay what they had borrowed, and were forced to give up their homes, cars and other consumer durable.
- Industrial production registered a fail of about 35 per cent.
- The number of the unemployed started rising, and in 1933. it touched 17 million. As unemployment soared, people trudged long distances looking for any work they could find. Ultimately, the US banking system itself collapsed.
Question: Explain the consequences of the Second World War.
Describe in brief the destruction caused during the Second World War.
- Death and Destruction: More than GO million people, or about 3 per cent of the world’s population, are believed to have been killed, directly or indirectly, as a result of the tear. Millions or more were injured too. Many big cities were reduced to ashes.
- Damage to Agriculture. Trade and Industries: The World War II caused a great damage to agriculture, trade and commerce. The terrible battles fought in different countries, made large tracts of land infertile. Lakhs of industries were destroyed which caused a severe damage to the industrial production. Many industries were closed down in the absence of sufficient raw materials.
- Increase in Soviet Russia’s Power and Prestige: The Second World War boosted up the power and prestige of the Soviet Union. Russian influence started increasing in the international held, and many countries got attracted towards communism.
- USA becomes a Super Power: The World War II made USA the supreme power of the world Undoubtedly, the USA played an important role in the victory of the Allies. After the war, no European country was either as powerful or as prosperous as the United States of America (USA).
- New Economic system: The main aim of the post-war international economic system was to preserve economic Stability and full employment in the industrial world. The Bretton Woods conference established the International Monetary fund IMP to deal with external surpluses and deficits its member nations. The International Bank for Reconstruction and Development ( popularly known as the World Bank) was set up to finance post-war reconstruction.
Question: ‘Economists and politicians drew two key lessons from inter-war economic experiences.’ Explain.
- Full employment: An industrial society based on mass production cannot be sustained without mass consumption. But to ensure mass consumption, there was a need for high and stable income Income could not be stable if employment was unstable Thus, stable income also required a stead. full employment.
- Intervention of government: Before the Second World War, most of the economists believed that capitalist economies or markets are self-sustaining. i.e. there is no need for government intervention. But the inter-war period proved that markets alone could not guarantee full employment.
- Therefore, the government would have to step into minimise fluctuations of price, output and employment. Economic stability could be ensured only through the intervention of the government.
Question: What is meant by the Bretton Woods Agreement? Explain.
Answer: The Bretton Woods Conference took place in the July of 1944 at Bretton Woods in New Hamsphire, USA. Under this system, the International Monetary Fund (IMP) and the International Bank for Reconstruction and Development (IBRD) were established. The main terms of this agreement were:
- Formation of IMF and IBRD (also called the World Bank).
- To establish monetary cooperation amongst the member countries.
- Adjustable peg foreign exchange rates system was followed, i. the exchange rates were fixed, with the provision of changing them if necessary.Currencies were required to be convertible for trade related and other current account transactions. The governments, however, had the power to regulate capital flows.
- All member countries were required to subscribe to the IMF’s capital.
Question: What were the impacts of the Bretton Woods system? Explain.
- Bretton Woods system inaugurated an era Of unprecedented growth of trade and income for the Western industrial nations and Japan.
- It provided a big boost to the world trade which grew annually at over 8 per cent between 1950 and 1970. and incomes at nearly 5 per cent.
- The grow-h was also mostly stable, without large fluctuations.
- The system also controlled the unemployment which averaged less than 5 per cent in most industrial countries.
- These decades also saw the worldwide spread of technology and enterprise. Developing countries were in a hurry to catch up with the advanced industrial countries. Therefore, they invested vast amounts of capital, importing industrial plans and equipment featuring modern technology.
Question: ‘In the. 19th century, all over the world more than 150 million people migrated from one country to another.’ Explain the factors responsible for this migration.
- Abolition of Corn Laws and free trade: The scrapping of the Corn laws laid the foundation of free trade. Now, food could be imported Or exported into Britain freely.
- New Economic activities: The free trace led to development of railways and new ports. People had to settle or, the lands to bring them under cultivation. This meant building homes and settlements. All the construction activities needed labour. The demand for labour in places where labour was in short supply led to migration.
- Role of technology: The railways, steamships, lighter wagons helped the people to move from one country to another.
- Imperialism: The wave of imperialism engulfed the whole world and due to this people migrated from one nation to another.
- Different flows: The flow of trade accompanied with capital paved way for the flow of labour.
Question: Explain the role of technology in shaping the world economy of the 19th century.
What was the impact of technology on food availability? Explain with the help of examples.
What was the role of technology in transforming in the 19th century world? Explain with an example.
- Transformation of the world economy: Technology played a major role in all these developments. Railways, steam shipping, telegraph, etc. were important inventions without which it was not possible to imagine the transformation of nineteenth-century world.
- Linking the markets: New investments and improvements in transport: faster railways. lighter wagons and larger ships helped move food more cheaply and quickly from far away farms to final markets.
- Impact on the meat trade: Till the 1870s, moat from America was shipped to Europe in the form of live animals which were then slaughtered in Europe. But live animals took up a lot of ship space. Many also died in voyage, fell ill. lost weight or became unfit to eat. So the prices of meat were very high and it was beyond the reacts of the European poor. Due to high price, the demand and production was low. But the invention of refrigerated ships made it possible to transport meat from one region to another.
- Social peace and Imperialism: The refrigerated ships reduced shipping cost and lowered meat prices in Europe. The poor in Europe could now consume a more varied diet. Better living conditions promoted social peace within the country and support for Imperialism abroad.
- Colonialism: Technology played very important role in linking the world markets which promoted the sprit of colonialism.
Question: Define the term ‘Trade Surplus’. How was the income received from trade surplus with India used by Britain?
- When the value of exports is higher than value of imports, it is called as ‘Trade Surplus’.
- Britain used this surplus to balance its trade deficits with other countries — that is. with countries from which Britain was importing more than it was selling to.
- This is how n multi-lateral settlement system works—it allows one country’s deficit with another country to be settled by its surplus with a third country.
- By helping Britain balance its deficits. India played a crucial role in the late- nineteenth century world economy.
- Britain’s trade surplus in India also helped to pay the so-called ‘home charges’ that included private remittances home by British officials and traders, interest payments on India’s external debt, and pensions of British officials in India.
Question: What do you know about the Great Depression? Explain the major factors responsible for the Great Depression.
Answer: This was a period during which most parts of the world experienced catastrophic decline in production, employment, income and trade. The state of Economic Depression set in the United States of America in 1929 and engulfed the entire world. Tins state of Economic Depression set in the United States of America (USA) in 1929. and engulfed the entire world. Hence, it is known as the Greet Depression. Causes of Economic Depression:
- Conditions created by the War: There was an immense industrial expansion in view of the increased demands of goods related to army during the period of the First World War. After the war, the industries went through the same proliferation. However, the sharp decrease in demands for military and war products gave birth to the economic depression.
- Overproduction in agriculture: Agricultural overproduction was one another major factor responsible for the depression. This was made worse by falling agricultural prices. As prices slumped, and agricultural income declined, farmers tried to expand production, and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. The farm produce rotted for lack of buyers.
- Shortage of loans: In the mid 1920s, many countries financed their investments through loans from the US. While it was often very easy to raise loans in the US during the boom period, but the US overseas lenders panicked at the first sign of trouble.
- Multiple effect: The withdrawal of lenders from the market had a multiple effect. In Europe, it led to the failure of some major banks, and the collapse of currencies such as the British pound and the sterling.In Latin America and elsewhere, it intensified the slump in agricultural and raw material prices. The US attempt to protect its economy in the depression by doubling import duties also dealt another severe blow to the world trade.
Question: How did Henry Ford revolutionise mass production in the US? Explain.
- Henry Ford adopted the assembly line of a Chicago slaughterhouse to his new car plant in Detroit.
- The assembly line allowed a faster and cheaper way of producing vehicles. It forced workers to repeat a single task mechanically and continuously.
- This increased their efficiency in the single task and the speed of production too.
- Standing in front of the conveyor belt, no worker could delay the motion or take a break.
- In the beginning many workers quit, since they could not cope up with the stress of work. ages and against that he not only increased the speed of the conveyor belt but also banned trade unions.