Question: Explain the impact of the Great Depression on the Indian economy.
Explain the impact of the Great Depression on Indian farmers in the early twentieth century.
- Impact on trade: The depression immediately affected Indian trade. India’s exports and imports nearly halved between 1928 and 1934. As international prices crashed, prices in India plunged. Between 1928 and 1934 wheat prices in India fell by about 50 per cent.
- Impact on farmers: The fall in prices had a deep impact on the poor farmers. Though agricultural prices fell sharply, but the colonial government refused to give any relief to the farmers in taxes. Peasants producing tor the world market were the worst hit.
- Impact on Urban India: The depression proved less grim for urban India. Because of falling prices those with fixed income- say town-dwelling landowners, who received rents and middle-class salaried employees now found themselves better off. Every thing low cost.
- High Industrial investment: Industrial investment also grew as the government extended tariff protection to industries, under the pressure of nationalist opinion.
- Political Impact: The Great Depression paved way for Gandhiji to launch the Civil Disobedience movement.
Question: G-77 can be seen as a reaction to the activities of Bretton Woods Twins. Explain the statement with five arguments.
- The Bretton Woods Twins — the IMF and the World Bank were dominated by the former colonial powers As a result, most developing countries did not benefit from the fast growth that the western economies experienced in die 1950s and 1960s. So. they organised themselves as a croup — the group of 77 of G-77 to demand a new International economic order.
- Former colonial powers exploited the natural resources for developing nations through the IMF and the World Bank.
- The developing nations organised themselves into G-77 so as to gain real control over then natural resources.
- They wanted to get more development assistance and fairer prices tor raw materials.
- They also wanted a better opportunity for their manufactured goods in the markets of developed nations.
Question: What were the factors which were responsible for the end of the Bretton Woods system?
- The Decline of US Currency: After 1960s, the US was no longer the dominant economic power as it had been for more than two decades The US dollar now no longer commanded confidence as the world’s principal currency. Tire dollar could not maintain is value in relation to gold
- New powers: By the mid-1960s, the E E C and Japan had become international economic powers in their own right. With total reserves exceeding those of the US. with higher levels of growth and trade, and with per capita income approaching that of the US. Europe and Japan were narrowing the gap between themselves and the United States.
- Rise of Western Commercial Banks: From the mid-1970s, the International financial system also changed in important ways. Earlier, developing countries could turn to international institutions for loans and development assistance. But now. they were forced to borrow from Western commercial banks and private lending institutions- This led to periodic debt crises in the developing world and lower income along with increased poverty, especially in Africa and Latin America.
- Problem of unemployment: The industrial world was also hit by unemployment that began rising from the mid-1970s, and remained high until the early 1990s. From the late 1970s, MNCs also began to shift production operations to low-wage Asian countries.
- Rise of China and Soviet Union: China had been cut off from the post-war world economy since its revolution in 1949. But new economic policies in China and the collapse of the Soviet Union and the Soviet* style communism in Eastern Europe brought many countries back into the fold of the world economy.
- Low cost structure in China: The Chinese economy emerged ns a new super power due to low cost structure. Wages were relatively low- in countries like China. Thus they became attractive destinations for investment by foreign MNCs competing to capture the world markets.
Question: What were the main sources of attraction for Europeans to come to Africa in the late nineteenth century? How did they exploit their resources?
- Europeans were attracted to Africa due to its vast resources of land and minerals.
- Europeans came to Africa hoping to establish plantations and mines to produce crops and minerals for export to Europe.
- Inheritance laws were changed so that peasants were displaced from land: only one member of a family was allowed to inherit land, as a result of which the others were pushed into the labour market.
- Europeans divided different regions of Africa among themselves.
Question: Explain any four measures adopted by America for postwar (First World War) recovery.
- USA moved towards mass production which lowered the cost of production.
- Due to lower cost of production producers started giving higher wages to the worker.
- The demand for common household products boomed the housing sector.
- The housing and consumer boom of the 1920s created the basis of prosperity in the US. Large investments in housing and household goods seemed to create a cycle of higher employment and incomes, rising consumption demand, more investment, and yet more employment and incomes.
- In 1923. the US resumed exporting capital to the rest of the world and became the largest overseas lender.