The Great Depression
1. When did the Great Depression begin?
A) 1925
B) 1929
C) 1935
D) 1940
Answer: B) 1929
2. What was one of the key causes of the Great Depression?
A) Overproduction of industrial goods
B) Agricultural overproduction and falling prices
C) High levels of consumer spending
D) Decrease in global trade
Answer: B) Agricultural overproduction and falling prices
3. Which country’s loan withdrawals triggered a global crisis during the Great Depression?
A) Britain
B) Germany
C) The United States
D) France
Answer: C) The United States
4. Which sector was the worst affected during the Great Depression?
A) Industrial regions
B) Agricultural regions
C) Urban manufacturing centers
D) Financial institutions
Answer: B) Agricultural regions
5. What happened to US banks during the Great Depression?
A) They flourished due to increased loans
B) Thousands of banks went bankrupt and closed
C) Banks reduced interest rates to support businesses
D) There was no impact on banks
Answer: B) Thousands of banks went bankrupt and closed
6. How did the Great Depression affect India?
A) It had no significant impact
B) India’s economy grew due to export demands
C) Peasants faced debt, and India became an exporter of gold
D) Industrial growth increased
Answer: C) Peasants faced debt, and India became an exporter of gold
7. Which famous economist believed that Indian gold exports helped global recovery during the Depression?
A) Adam Smith
B) Karl Marx
C) John Maynard Keynes
D) David Ricardo
Answer: C) John Maynard Keynes
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Explanations:
– Q1 & Q2: The Great Depression started in 1929, primarily due to agricultural overproduction, which caused prices to fall.
– Q3: The withdrawal of US loans had a domino effect, causing financial instability worldwide.
– Q4: Agricultural regions were hardest hit as crop prices plummeted.
– Q5: Many US banks collapsed due to unpaid loans and financial panic.
– Q6 & Q7: In India, peasants suffered from debt, and the country exported gold to meet financial obligations. Keynes believed this helped global economic recovery.
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Rebuilding a World Economy: The Post-war Era
1. Which two powers dominated the post-World War II reconstruction?
A) Britain and France
B) The United States and the Soviet Union
C) Germany and Italy
D) China and Japan
Answer: B) The United States and the Soviet Union
2. What was the key objective of post-war economic reconstruction?
A) Promote military expansion
B) Establish colonial empires
C) Rebuild economies and maintain global stability
D) Spread socialism worldwide
Answer: C) Rebuild economies and maintain global stability
3. Which international agreement led to the creation of the IMF and the World Bank?
A) Treaty of Versailles
B) Bretton Woods Agreement
C) Marshall Plan
D) United Nations Charter
Answer: B) Bretton Woods Agreement
4. What did the Bretton Woods Institutions aim to achieve?
A) Military alliances
B) Economic stability and financial cooperation
C) Political dominance in Europe
D) Expansion of colonial rule
Answer: B) Economic stability and financial cooperation
5. Which country emerged as the dominant economic power after WWII?
A) Germany
B) Soviet Union
C) United States
D) Japan
Answer: C) United States
6. What lesson did economists learn from the interwar period?
A) Free markets need no government intervention
B) Mass production requires mass consumption supported by stable incomes
C) Isolationist policies are best for growth
D) War boosts long-term economic prosperity
Answer: B) Mass production requires mass consumption supported by stable incomes
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Explanations:
– Q1 & Q2: After WWII, the US and the Soviet Union dominated global politics and economics, focusing on reconstruction and stability.
– Q3 & Q4: The Bretton Woods Agreement established the IMF and the World Bank to ensure financial stability.
– Q5: The US emerged as the global economic leader due to its industrial strength and financial stability.
– Q6: Economists recognized that stable employment and income were vital for sustaining mass production and consumption.
