BASIC CONCEPTS - AFLOW CHART

Making of global world has a long history

of trade, m1grat1on of people 1n search of
work. movement of capital, etc.

Food travel
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become • Indian OCea
•
 ~Ill. THE INTER WAR ECONOMY J
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Wartime Transformations
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Wartime Transformations
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Britain a leading economy faced a
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First World War
prolonged crisis
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British under huge external debt
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Allies
Bntain
France
Central Powers
Germany
Austria-Hungary
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War led to an economic boom but
Russia Italy post-war led to unemployment
and USA Ottoman Turkey
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• Was the first modern Industrial war
In agriculture, after the First World
War, wheat production fell in Europe
and increased in Canada, America and
• Used tanks, machine guns, aircraft,
chemical weapons, etc.
Australia

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Grain prices fell, rural incomes
• Millions died, reducing the able-bodied
workforce in Europe
• The war transformed US from international
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declined leaving the farmers into debt

debtor to International creditor

~ .
Rise of Mass Production and Consumption
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The Great Depression
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• In US, war helped boost its economy • Began in 1929 in US
• Important feature of economy was mass • Because of fall in agro-products
production • Over production of agricultural products
• Henry Ford was the pioneer in mass production • Many countries got financed through loans from US
• Followed Assembly Line Technique for its banks
success • Led to failure of some banks and collapse of currency
• This practice was widely followed in Europe also • Prices fell, US also fell into its trap power
• Credit system introduced to increase purchasing • Led to boom in housing and consumer goods
power • Banks closed, unemployment leading to great
• Led to boom in housing and consumer goods depression
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• India's exports and imports fell

India and The Great Depression
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• Peasants producing for the world market were the worst hit .
• Peasants' indebtedness increased and they sold their precious metals to meet their expenses
• India became an exporter of precious metals (gold) . .,
• India gold export promoted global economic recovery and helped speeding up ~ntains recov~ry
• Industrial investment grew in urban India as government extended tariff protection to indu st nes
 1_ Isolation: Means the state of being alone It may
imply a cone ~.0r of being a.poit from
all human beings or of being cut off from one's usual associates,
2. Decimate: To destroy a large number.
3. Dissent: To differ in opinion, especially from the majority.
4. Perishable: Liable to spoil or decay.
5. Indentured labour· Is an employee (indentu red; within a systerr of Jnfr~e labour, who is
bound by a contract (indentu re) to wor~ for a particular empIoyer for a fo·..ed period of
time.
6. Tariff: A tax or duty to be paid on a particula r class of irnoorts O" exports.
7. Great Depression: The economi c crisis period of low busir:ess activity in the U.S. a;-,d
other countries, roughly beginning with the stock-market crash in ~929 a1d continuing
through most of the 1930s.
8. International Monetar y Fund: The International Monetar y Fund (IMF) is ar irrten-sa:.ora.J
organization, created for the purpose of standardizing glooa' firianc.a, ,.e a:.0"':; a::d
exchange rates. The IMF generally monitors the global economy, and rs core goa1 is to
economically strengthen its member countries .
9. World Bank: Is an internatio nal financial institutio n that provides loa.'ls to de,e ~raing
countries for capital programs. It comprises two institutions: the lnterrat:o ra.. 3a: ✓ .csr
Reconstruction and Develop ment (IBRD), and the International Developm entAsso cano-
(IDA).
10. G-77: The G-77 is a loose coalition of developing nations, designed to promote its
members' collective economic interests and create an enhanced joint negotiati ng capacity
of the United Nations.
11. NIEO: The New Internati onal Economic Order.
12. Fixed exchange rate: A type of exchange rate regime where a currency 's value is fixed
and under which the governm ent or central bank ties the official exchange rate to
another country's currency or to the price of Gold.
13. Floating exchange rates: a type of exchange rate regime in which a currency 's value is
allowed to fluctuate in response to foreign - exchange market mechanism.
14. Globalisation: It is a process by which businesses or other organisations develop
international influence or start operatin g on an internatio nal scale.

1820-1914 - World trade is estimated to have multiplie d by 25 to 40 times.

1885 - The European powers met in Berlin and demarcated the African continent
for respective powers. . .
1890s - A fast spreading disease of cattle plague or rinderpest had a temfyrng
impact on people's livelihoods and the local economy.
1914-1918 - World War I (Inter-wa r economy )
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 19)0, - i\giicult 111 ,\I ovrq)I oduc I ion w,1c; n mnjor pmhlc•n1
1c:121 - l he p1.,c:lirn 01 i11rlc11l1111•cl l11bo111 w,1~ nholtc;hrcl
1923 - US ,c,111n0cl expo, I ing rnprlltl lo l he , est of I lie· world find crncrgccl n~ lhv
l:ug0st ovet~f\l'- lc11dc1 .
1933 _us went h.111k111pt 1111d 41000 bunks we,e closed .
1939 - 19415 Wolld W,11 II
1944 United N,,lion-. Monct, 11 y 1111d I ir1L111Cittl Conference ttl Bret ton Woods :i
New Hn111p$hi1c USA , 1

1947 - tntcr1ution,1l Monctwy 1:1111d and Wo1ld 13trnk began lhe1r opcratron~
'1950s - The Bretton Woods institutions beg,111 lo shift lhcir focus on .

Multiple Choice Questions - ___ _ [1 mark)

Choose and write tf1r corrut optio,1,
I . What dol's the 'Silk Roul e' rcfo r to?
(a) Pre.,L'l1t•d:l) \\l'~I ,\si,1
(0>) \\'1·s1-ho1111cl Chi111·st· ~ilk cargo,:-,
(<') l111rodm:11on ot'lrnmbll' pot,1tn (d) llo1h (:i) and (b)
2. Which was the fr1bled city of gold?
(a) Peru (Ii) Mt•,1rn
@ El Do1~do (d) Sp;11n
3. What 'technology' helped in trunsporling pcrishnblc good s?
(a) Refrigerated .1ircralis (Ii) Rdrig1:ratcd 1~1ilways
0
Refrigerated ships (d) Both (a) a11d (b)
4. Who was the pioneer of mass prnductlon?
(a) John Winthorp
(b) Su I lcnry ~lmtou S1a11lc)
@Henry Ford
(cl) Noncofthc,e
5. Why were Europeans attracted to Africa?
@
Resources
(h) Wl'athl'r
(c) Economic devclopmen1
(cl) All ol't hc abuH'
6. The most common food of the world was not known lo:
(a) Americans (l?) Asia ns (c) Europt'ill) ~
7. The silver metal was not available in ;
@) Peru (b) Mexico (c) Canada
8. In the 18th century, which among th e following was not u rich country?
@ Peru (b) Chin a (c) India
9. Which out of the following wos beyond the rcuch of the poor in 18th century Europe?
(a) Brem! (IJ) Mea 1 (r) Po1;1tut·\
1O. Which of the following was 1101 a dcstinution for Indian indcnturt.'d migrunts?
(a) Caribbea n island ~ (Ii) Fiji (cy J,ip,lll
~sw;is
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1. (b)
9. (b)
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2. (r)
JO. (r. )

',oc al Su~nc:: '/.

3. (r. ) 4. (c) 5. (a) 6. (/,) 7. (a)