The Bretton Woods Agreement set up a fixed-exchange-rate system, with all currencies tied to the US dollar, which itself was convertible into gold at the fixed rate of $35 per ounce. This was intended to allow stability in international trade through the reduction of currency value changes. Countries were also encouraged to fix parity rates for their currencies within 1% of the original rate against the dollar.
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- The group functions with the help of several chapters to address specific global issues.
- Establishing a stable monetary framework, encouraged countries to engage in trade without fear of sudden currency depreciation.
- The growing discontent became a severe concern in 1971 when the US used the system to protect its economic interests against the rest of the world.
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Question 8. Explain the causes of the Great Depression.
(ii) Over the nineteenth century, food grain and raw material exports from India to Britain and the rest of the world increased. But the value of British exports to India was much higher than the value of British imports from India. Britain used this surplus to balance its trade deficits with other countries.
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- (iii) The US attempt to protect its economy in the depression by doubling import duties also proved a severe blow to world trade.
- These institutions did nothing for the economic growth of former colonies and developing countries.
- As international prices crashed, prices in India also plunged.
- They (developing nations) organised themselves into a group, G–77 (named after the original number of participating countries), to pursue a developmental agenda that would treat everyone on equal footing.
- The New International Economic Order (NIEO) represents proposals advocated by developing countries to end economic colonialism through a new interdependent economy.
The value of the dollar fluctuated wildly, and countries began to adopt different monetary policies. This made it more difficult for businesses to trade and invest across borders. However, it also created new opportunities for businesses to move their operations to countries with lower wages and costs.
Question
NCERT Solutions for CBSE Class 10 Social Science have total 27 chapters. 10 Social Science NCERT Solutions in PDF for free Download on our website. Ncert Social Science class 10 solutions PDF and Social Science ncert class 10 PDF solutions with latest modifications and as per the latest CBSE syllabus are only available in myCBSEguide. The Bretton Woods Agreement, signed in July 1944, marked a significant turning point in international economic relations following World War II.
History
The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance post-war reconstruction and they started the financial operations in 1947. Decisionmaking authority was given to the Western industrial powers. The Bretton Woods system opened an era of unique growth of trade and incomes for the Western industrial nations and Japan. Answer 5 In order to preserve economic stability and full employment in the industrial world, the post-war international economic system was established.
However, criticism of the system (Bretton Woods) was also building up. Some participating countries felt that the IMF and IBRD were becoming merely instruments of a strategy of the dominant country, the US, and a few other nations. Designed to rebuild the world economy, the Bretton Woods system failed in 1971 when the United States unilaterally decided to sever the linkage of dollar to gold. All the 44 signatory nations of the agreement contributed fees towards the initial funding of the two institutions.
Manipulation of currencies was done to manage foreign trade, which led to currency warfare and restrictive trade practices. This manipulation led to the deflation and devaluation of many currencies. The post-war measures towards Rebuilding World Economy included the Bretton Woods System, the G-77 alliance, and the NIEO.
The group functions with the help of several chapters to address specific global issues. Most major world economies allowed their currencies to float against the dollar freely within a couple of years. In the post-World War II period during the ’50s and ’60s, impressive development was seen in some of the countries. The fully negotiated monetary system of Bretton Woods was in force. The overall level of economic development indicated that the performance of the Bretton Woods System had a positive impact on several nations. Since the First World War, a few countries had started controlling imports and exports to offset wartime blockades.
The Bretton Woods system was effective for many years, but it began to fail in the 1960s. End of Bretton Woods and the Beginning of ‘Globalisation’ – Class 10 Social Science Chapter 3 The Making of a Global World discusses that the Bretton Woods system was a system of monetary management established in 1944. It was designed to promote economic stability and full employment in the industrial world. The system required countries to peg their currencies to the US dollar, which in turn was convertible to gold at a fixed price of $35 per ounce.
History Class 10 Chapter 4 Question Answer Solutions
(e) The relocation of industry to low-wage countries stimulated world trade and capital flow. In the last two decades, the world’s economic geography has been transformed as countries such as India, China and Brazil have undergone rapid economic transformation. Since men went to battle, women stepped in to undertake jobs that earlier only men were expected to do. The war led to the snapping of economic links between some of the world’s largest economic powers which were now fighting for each other to pay for them.
The International Bank for Reconstruction and Development (popularly known as the World Bank) was set up to finance postwar reconstruction. The IMF and the World Bank are referred to as the Bretton Woods institutions or sometimes the Bretton Woods twins. In what is meant by the bretton woods agreement class 10 this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate. In today’s world of endless information , knowing how to think is more important than knowing what to think .
She mentors her students personally and strives them to achieve their goals with ease. Call us and we will answer all your questions about learning on Unacademy The growing discontent became a severe concern in 1971 when the US used the system to protect its economic interests against the rest of the world. Finally, the system collapsed in 1971, with the US unilaterally terminating the dollar’s convertibility to gold. The US dollar as the dominant currency was helping development and currency exchange balances in several participating countries.