The Making of a Global World Extra Important Previous Years’ Topic Wise Questions Class 10 History CBSE

Rebuilding a World Economy: Post-War Era

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Q. Explain the two key, lessons learnt by economists and the politicians from the economic experiences of the Second World War. (Term-I 2014) 

Ans. The economists and politicians learnt two key lessons from the inter-war economic experiences of the Second World War.  

(i) First, an industrial society based on mass production cannot be sustained without mass consumption. 

(ii) There was a need for high and stable income which depends on full employment of the people.  

(iii) Since market alone could not guarantee full employment; government should intervene and take steps to minimize fluctuation of market forces.  

(iv) The second lesson is that the global economy is inter-related. (v) The goal of full employment could only be achieved if governments had power to control flow of goods, capital and labour. 

Q. What steps were taken by the economists and politicians of the world to meet the global economic crisis that arose after the Second World War? (Term-I 2012) 

Ans. The steps taken are as follows:  

(i) Bretton Woods Conference established IMF to deal with external surplus and deficit of its members.  

(ii) The World Bank was set up to finance postwar reconstruction.  

(iii) Bretton Woods System was based on fixed exchange rates.  

(iv) Dollar was anchored to gold at a fixed price. 

Q.  When was the Bretton Woods conference convened? State the main aim of the conference.  [Term-I, 2014, 11] 

Answer: 

(i) The Bretton Woods Conference was convened in July, 1944 at Bretton Woods in New Hampshire, USA 

(ii) Its main aim was to preserve economic stability and full employment in the Industrial world.  

(iii) The Conference established International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank). 

Q. Explain the role of Bretton Woods institutions in post-Second World War settlement.  (Delhi, 2020) 

Ans. Role of the Bretton Woods Institution:  

(i) It inaugurated an era of unprecedented growth of trade and incomes for the western industrial nation  

(ii) World trade grew  

(iii) Incomes of people in western countries grew.  

(iv) The growth was stable without fluctuations.  

(v) The unemployment rate reduced  

(vi) There was world wide spread of technology and enterprise. 

A Topper’s Answer 

Q.  Describe any five factors that led to the end of the Bretton Woods System and the beginning of globalisation.  [Term-I, 2016-17] 

Ans. The important reasons behind the end of Bretton Woods system are:  

(i) Decline in economic power of the USA.  

(ii) Change in the international financial system.  

(iii) Unemployment in industrialised countries.  

(iv) Shifting of production enterprises.  

(v) Changes in China. 

Another Version Answer: 

The five factors are:  

(i) Decline in economic power of the USA.  

  • (a) US dollar no longer commanded confidence.   
  • (b) US dollar could not maintain its value in relation to gold.  
  • (c) Collapse of fixed exchange rates on floating exchange rates.  

(ii) Change in the international finance: The International Monetary Fund and the World Bank were created to meet the financial needs of the industrial countries. International financial system changed, and developing countries were forced to borrow from western commercial banks.  

(iii) Unemployment in industrialised countries: Industrial world was hit by unemployment. The number of unemployed started rising and people travelled long distances looking for any work they could find.  

(iv) Shifting to production enterprises: MNCs shifted their production units to Asian countries because of abundant labour and low wages.  

(v) Changes in China: China became an attractive destination for investment by foreign MNCs. 

Q.  Mention three reasons for the creation of International Monetary Fund and the World Bank.  [Term I, 2015] 

Answer: 

(i) The International Monetary Fund and the World Bank were created to meet the financial needs of the industrial countries.  

(ii) When Japan and Europe rapidly rebuilt economies, they became less dependent on the IMF and the World Bank.  

(iii) Thus, from the late 1950s the Bretton Woods Institutions, World Bank and IMF, began to turn their attention towards newly developing countries.  

(iv) The newly independent countries facing problems of poverty came under the guidance of international agencies dominated by the former colonial powers. 

Q.  Explain the role of New International Economic Order (NIEO).  [Term I, 2014] 

Ans. The Group of 77 or G-77 demanded a New International Economic Order (NIEO). By the NIEO they meant a system that would give them:  

(i) Actual control over their natural resources.  

(ii) More development assistance.  

(iii) Fairer prices for their raw materials.  

(iv) Better access for their manufactured goods in developed countries’ markets 

Q. Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins? 

Ans. G-77 or Group of 77 refers to the seventy-seven developing countries that did not benefit from the fast growth western economies experienced in 1950s and 1960s. So, they organized themselves into G-77. They demanded:  

(i) A new international economic order that would give them real control over their natural resources. 

(ii) More development assistance.  

(iii) Fairer prices for raw material.  

(iv) Better access for their manufactured goods in developed countries’ markets. 

Q. Describe the circumstances responsible for the formation of G-77. [CBSE 2014] 

Ans. The developing countries were not benefitted from the fast-growing western economies so they organized together and formed a Group of 77 which is commonly referred to as G-77 and demanded a new international economic order.  

Their demand for NIEO was to get the real control over their own natural resources, development assistance, and fairer prices for the raw materials and access for their manufactured goods in the markets of the developed nations. 

Q. What is Group 77? Why did Group 77 countries demand a New International Economic Order? Explain. (Term-I 2014) 

Answer:  

  • As colonies, many of the less developed regions of the world had been part of Western empires. As newly independent countries facing urgent pressures to lift their populations out of poverty, they came under the guidance of international agencies that was dominated by the former colonial powers. The former colonial powers still controlled vital resources such as minerals and land in many of their former colonies. 
  • Even the large corporations of other powerful countries, for example the US, also often managed to secure rights to exploit developing countries’ natural resources very cheaply. 
  • At the same time, most developing countries did not benefit from the fast growth the Western economies experienced in the 1950s and 1960s. 
  • Therefore, they organised themselves as a group – the Group of 77 (or G-77) – to demand a new international economic order (NIEO). 
  • By the NIEO they meant a system that would give them real control over their natural resources, more development assistance, fairer prices for raw materials. and better access for their manufactured goods in developed countries’ markets. 

Q. Why did most of the developing countries organise themselves as a group – the Group of 77 (G-77)? (Term-I 2012) 

Answer:  

(i) The developing countries came under the guidance of IMF and World Bank which were dominated by the former colonial powers in order to uplift their economies.  

(ii) Former colonial powers exploited the natural resources of developing nations through IMF and World Bank.  

(iii) The developing nations organised themselves into G-77 so as to gain real control over their natural resources, to get more development assistance and fairer prices for raw materials.  

(iv) They also wanted a better opportunity for their manufactured good in the markets of developing nations. 

Q. “The relocation of industry to low-wage countries stimulated world trade and capital flows.” Justify the statement. [2014] 

Answer: 

(i) MNCs shifted their production units to Asian countries because of cheap labour and low wages. 

(ii) Availability of raw materials and a large market.  

(iii) Effects: It stimulated world trade and the flow of capital. Countries like India, China and Brazil underwent a rapid economic transformation. It generated employment opportunities and introduced competition in the domestic markets. 

Q.  “The multinational companies (MNCs) choose China as an alternative location for investment?” Explain the statement. [Term-I, 2016-17]  

Q. ‘China becomes an attraction destination for investment by foreign MNCs in the 19th and 20th centuries.’ Justify the statement. [Term I, 2015] 

Answer: 

(i) Since the revolution in 1949, China gradually came in the field of world economy. It attracted the foreign MNCs because of its lowest economic structure.  

(ii) Wages were relatively low.  

(iii)China had the largest population besides labour. They also formed a large consumer base. 

Another Version 

China becomes an attraction destination for investment by foreign MNCs in the 19th and 20th centuries because:  

(i) Wages were relatively low in countries like China.  

(ii) This was because of the low-cost structure of the Chinese economy, most importantly its low wages.  

(iii) TVs, mobile phones and toys were seen in the shops which seemed to be made in China. 


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