It made the feminist movement even stronger.(d) By the early twentieth century, the global economy had become an integral one. India was a British colony that exported agricultural goods and imported manufactured goods. Under the impact of Great Depression, the Indian economy was closely becoming integrated into the global economy.
The primary designers of the Bretton Woods system were the famous British economist John Maynard Keynes and chief international economist of the U.S. Keynes’ hope was to establish a powerful global central bank to be called the “Clearing Union” and issue a new international reserve currency called the bancor. White’s plan envisioned a more modest lending fund and a greater role for the U.S. dollar, rather than the creation of a new currency. In the end, the adopted plan took ideas from both, leaning more toward White’s plan.
What Is the Difference Between the Gold Standard and the Bretton Woods System?
Along the way the disease killed 90 per cent of the cattle. (iii) The British government also restricted the import of corn by introducing the Corn Laws. But these laws were soon abolished as a result of which food could be imported into Britain more cheaply than it could be produced within the country. The gold standard refers to any monetary system in which the value of currency is linked to gold. Currently, there are no countries that use the gold standard.
The exchange rate applied at the time set the price of gold at $35 an ounce. Under the Bretton Woods system, gold was the basis for the U.S. dollar, and other currencies were pegged to the U.S. dollar’s value. The Bretton Woods system effectively came to an end in the early 1970s when President Richard M. Nixon announced that the U.S. would no longer exchange gold for U.S. currency. (ii) The technique of cold storage and use of refrigerated ships boosted the export of perishable goods. Now animals were slaughtered for food at the starting point in America, Australia or New Zealand and then exported to Europe where meat was scarce. (iii) As international prices crashed, prices in India, also plugged.
Bretton Woods Agreement and the Institutions It Created Explained
In the 1960s, the dollar had struggled within the system set up under the Bretton Woods agreement. In 1971, President Nixon suspended its convertibility into gold. Today, currencies float against each other, rather than keeping at firm pegs. (iii) The International Bank for Reconstruction and Development popularly known as the World Bank was set up to finance post-war reconstruction. (ii) To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains. The scale of death and destruction was beyond imagination.
- As with the benefits of all currency pegging regimes, currency pegs are expected to provide currency stabilization for the trade of goods and services as well as financing.
- Thus, rinderpest played an important role in making Africa a puppet in the hands of colonisers.
- After a run on gold reserve, he declared a temporary suspension of the dollar’s convertibility into gold.
- All of the countries in the Bretton Woods system agreed to a fixed peg against the U.S. dollar with diversions of only 1% allowed.
- (v) By establishing control over the scarce resources of cattle the European colonisers easily sub-dued Africa which they wanted from the day they came to this continent.
As international prices crashed so did the prices in India. Between 1928 and 1934, wheat prices in India fell by 50 percent. The fall in agricultural price led to a reduction of farmers’ income and agricultural export. The government did not decrease their taxes due to which peasants’ indebtedness increased all across India.
Students are advised to read these solutions on a regular basis to score well. Some who escaped faced reverse punishment and some who stayed back sought to live by making their new destinations as ‘mini India’. (e) The respective governments of the MNCs imposed heavy import tariffs. So the MNCs began relocating their production to Asian countries. The Bretton Woods system—which required a currency peg to the U.S. dollar and linked the value of the dollar to gold—is no longer in effect.
While it was often extremely easy to raise loans in the US when the going was good, the US overseas lenders panicked at the first sign of trouble. In the first half of 1928, the US overseas loans amounted to over $1 billion. Countries that depended crucially on US loans now faced an acute crisis.
The Making of Global World Class 10 Questions and Answers History Chapter 4
(b) Rinderpest, a fast-spreading what is meant by the bretton woods agreement class 10 disease of cattle plague, was brought to Africa by Europeans in late 1880s. Entering Africa in the east, rinderpest moved west ‘like forest fire’ destroying almost 90 per cent of African cattle. It had a terrifying impact on people’s livelihoods and the local economy.
Planters, mine owners and colonial governments successfully monopolised what scarce cattle resources remained, to strengthen their power and to force Africans into the labour market. Very soon control over the African resources paved the way for European conquest. These institutions did nothing for the economic growth of former colonies and developing countries. They were still facing grim poverty and wanted to come out of it by strengthening their economic condition. (iii) The US attempt to protect its economy in the depression by doubling import duties also proved a severe blow to world trade. With the fall in prices and the prospect of depression, the US banks also slashed domestic lending and called back loans.
Class 10 History Chapter 4 NCERT Intext Activity Questions and Answers
Between 1928 and 1934, wheat prices in India fell by 50 per cent. This made the lives of peasants and farmers miserable. (iv) This forced the women to outside world in search of jobs.
Faced with falling incomes, many households in the US could not repay what they had borrowed. Thousands of banks went bankrupt and were forced to close. All of the countries in the Bretton Woods system agreed to a fixed peg against the U.S. dollar with diversions of only 1% allowed.