Short Answer Questions
Q.1. Explain the three types of flows within the international economic exchanges during 1815-1914. (2010)
Mention the three types movements of flows or within the international economy exchange in the 19th century. [2011 (T-1)]
(i) The first is the flow of goods, e.g. cloth or wheat. After the corn laws were scrapped in Britain, it started importing food. Eastern European countries, Russia and America increased their food productivity to meet the needs of Britain. There was faster growth of industry in Britain and, with increased food productivity in other countries, more land was put under cultivation. This meant building homes and settlements, which required capital and labour.
(ii) The demand for labour in places like America and Australia led to migration. There was flow of labour in search of employment. Nearly 50 million people migrated from Europe to America and Australia in the 19th century. All over the world about 150 million are estimated to have left their homes and crossed oceans for a better future.
(iii) This led to the third flow — movement of capital for short-term or long-term investments.m By 1890 a global agricultural economy had taken shape, accompanied by complex changes in labour patterns.
Q.2. Define the term ‘trade surplus’. How was the income received from trade surplus with India used by Britain? (2010)
What is meant by, ‘Trade Surplus’? Why did Britain have a trade surplus with India?
How did Britain’s trade surplus from India help her to balance its trade deficits?
Ans. Over the 19th century, British manufactures flooded the Indian market. Food grain and raw material exports from India to Britain increased. But the value of British exports to India was much higher than the value of British imports from India. Thus, Britain had a trade surplus with India.
(i) Britain used this surplus to balance its trade deficits with other countries, that is, with countries from which Britain was importing more than it was selling to them.
(ii) Britain’s trade surplus in India also helped pay the so called “home charges” that included private remittances sent home by British officials and traders, interest payments on India’s external debt and pensions of British officials in India.
Q.3. How did the First World War change the economic life of the people in Britain? Explain. (2010)
Ans. The First World War had a great impact on the economic life of the people of Britain. During the war, industries were restructured to produce war-related goods. Entire societies were reorganised for war. Women had to step in to take up jobs that earlier only men were expected to do. The men had gone to fight. After the war, economic recovery proved difficult for Britain. The war had led to an economic boom due to a large increase in demand, production and employment. As the war boom ended,m it resulted in less production and increased unemployment. In 1921, one in every five British workers was out of work. It created anxiety and uncertainty about work. Many agricultural economies also suffered a crisis. During the war Canada, America and Australia had expanded dramatically as suppliers of wheat while Europe had declined. The glut in wheat led to fall in grain prices, rural incomes declined and farmers fell into debt. Britain, which was a leading economic power, had to borrow large sums of money from US banks. This led to increased suffering of people.
Q.4. Explain the two factors responsible for the Great Depression in the world in 1929. (2010)
Ans. A worldwide economic crisis occurred in 1929 in many countries and lasted till 1934. It started in USA and engulfed many countries of the world except Russia.
(i) The American industry had got a great boost during the First World War of 1914-1918. They continued producing different articles even after the war, which created a glut in the market. As a result, exports fell and the home market could not absorb all the products. It led to catastrophic decline in production, employment, incomes and trade. There was unemployment as factories were closed, workers laid off, production went down by half.
(ii) The greatest sufferer was the agricultural region. During the war, America had become the greatest supplier of wheat along with Canada and Australia. But after the war the Eastern European countries revived their wheat production. There was a slump as in industries, prices fell steeply. Farm produce rotted due to lack of buyers.
Q.5. What is Group-77? Why did Group 77 countries demand a New International Economic Order? Explain. (2010)
Explain what is referred to as the G-77. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins? [2011 (T-1)]
Ans. The IMF and the World Bank or the Bretton Woods twins served in the reconstruction of these nations. In the process, large corporations of powerful nations like the USA often managed to secure economic and other extra-territorial rights over weaker nations. The economic advances made by the West and Japan in the 1950s and 1960s did not benefit most of the developing countries.
As a reaction to the activities of the Bretton Woods twins, they organised themselves into a group known as the Group of 77 or G-77 in order to demand a new international economic order (NIEO). The NIEO stood for a system that would give these nations real control over their natural resources, more development assistance, fairer prices for raw materials, better access for manufactured goods in their markets.
Q.6. Give two examples from history to show the impact of technology on food availability. [2010, 2011 (T-1)]
Explain with examples how technology helped in solving problems of food availability throughout the world in the 19th century. (2010)
Ans. The nineteenth century witnessed a high rate of growth in industrial and agricultural products.
(i) The technological development was accelerated by the industrial growth and increasing world trade. Colonies also provided the resources and markets which sustained the industrial growth. Thus, railways were needed to link agricultural regions to the ports from where the goods were transported to more destinations, thereby increasing food availability.
(ii) Shipbuilding also became an important industry and countries competed to control the trade routes on seas. Technology helped in the larger social, political and economic factors. For example, steamships and railways helped in carrying large volumes of trading materials between long and inaccessible distances.
(iii) A fine example of the interdependence of technology and economy was the trade in meat. The invention of refrigerated ships and use of chemicals which preserved perishable items for longer period lowered shipping costs and meat prices in Europe.
Q.7. Describe briefly the effects of Rinderpest in Africa in the 1980s. [2010, 2011 (T-1)]
Ans. The loss of cattle affected African livelihoods. Haunters, mine owners and colonial powers now bad monopoly over what scarce cattle resources remained. After control over the scarce cattle resources, European colonisers could conquer and subdue Africa.
Q.8. How was the food problem solved in Britain after the scrapping of Corn Laws. Explain. (2010)
Ans. The immediate effect of the British government’s decision to abolish the Corn Laws was the inflow of cheaper agricultural crops from Americas and Australia. Many English farmers left their profession and migrated to towns and cities. Some went overseas. This indirectly led to global agriculture and rapid urbanisation, a prerequisite of industrial growth.
Q.9. Explain how the First World War was so horrible as war like none other before. (2010)
Explain the effect of the death of men of working age in Europe because of the First World War.
Ans. The First World War was a war, like no other before. The war involved the world’s leading industrial nations which now harnessed the vast powers of modern industry to inflict the greatest possible destruction on their enemies.
It was the first modern industrial war of saw the use of machine guns, tanks, aircraft, chemical weapons, etc. on a massive scale. Millions of soldiers were recruited from around the world and moved to the frontlines of large ships and trains. The scale of death — 9 million dead, 20 million injured — was unthinkable before the industrial age. These deaths and injuries reduced the able-bodied work force in Europe. Household incomes declined after the war. Entire societies were reorganised for war — men went to battle, women stepped in to take up jobs that earlier only men were expected to do.
Q.10. What were the main reasons for the attraction of Europeans to Africa? [2010(T-1)]
(i) The Europeans were attracted to Africa due to its vast resources of land and minerals.
(ii) Europeans came to Africa to establish plantation and mines to produce crops and minerals for export to Europe.
(iii) The Europeans conquered African and carved up the continent among themselves and became colonial powers.
Q.11. What was the impact of technology on food availability? Explain with the help of examples. [2011(T-1)]
Ans. Technological advances like faster railways, lighter wagons and larger ships helped more food, more cheaply and quickly from faraway farms to final markets. The trade in meat is an example. Refrigerated ships carried frozen meats from America, Australia to Europe at a lower cost and reduced the price of meat in Europe. The poor in Europe could now eat meat. Better living conditions were promoted.
Q.12. Explain the effects of British government’s decision to abolish the Corn Laws. [2010, 2011(T-1)]
(i) Abolishing of Corn laws in England led to import of food more cheaply in Britain.
(ii) British agriculture was unable to compete with cheap imports and vast lands were left uncultivated, rendering thousands of men and women jobless. They flocked to cities or migrated overseas.
(iii) Higher incomes due to industrialisation in England led to more food imports and greater food production in Eastern Europe, Russia, America and Australia.
Q.13. Give three examples to show that the world changed with the discovery of new sea routes to America. [2010, 2011 (T-1)]
Ans. Discovery of new sea routes to America led to its vast lands and abundant crops and minerals attract Europeans to it. Legends spread in 17th Century Europe about South America’s fabled wealth in gold and expedition set off in search of El Dorado, the city of gold. The Portuguese and the Spanish conquered America and precious metals, (specially silver) from silver and Mexico increased their wealth. Many victims of religious conflicts in Europe fled to America. Slaves began to be imported from Africa to help grow cotton and sugar for European markets. Europe became the centre of the world trade.
Q.14. Why did the European employers find it difficult to recruit labour in Africa? Give two methods they used to recruit and retain labour. [2010, 2011(T-1)]
(1) European employers found it difficult to recruit labour in Africa because Africa had
(i) abundant land and;
(ii) a small population. For centuries land and livestock sustained African livelihoods. People rarely worked for a wage.
(2) (i) Europeans to attract labour, imposed heavy taxes which could only be paid by working for wages on plantations and mines.
(ii) They changed inheritance laws to displace peasants from land; only one member of a family was allowed to inherit land. This pushed the rest the others in the labour market.
Q.15. What was the Corn Law? Why was the Corn Law abolished? What was the result of the abolishing of Corn Law? [2010(T-1)]
What were Corn Laws? How did the abolition of ‘Corn Laws’ affect the people of England?
Ans. ‘Corn Laws’ were laws passed by the British government to restrict the import of corn. Corn laws led to high food prices because the demand for food grains had gone up in the urban and industrial cities. This led to the abolition of Corn Laws, forced on the government by industrialists and urban dwellers. The result was that food could be imported cheaply in Britain. Import of cheap food led to vast areas of land being left uncultivated, rendering thousands of men and women without jobs. People migrated to cities or overseas.
Q.16. The testimony of an indentured labourer : [2010(T-1)]
Extract from the testimony of Ram Narain Tewary, an indentured labourer who spent ten years on Demerara in the early twentieth century.
...... in spite of the best efforts, I could not properly do the works that were allotted to me ...... in a few days I got my hands bruised all over and I could not go to work for a week for which I was prosecuted and sent to jail for 14 days ...... new emigrants find the tasks allotted to them extremely heavy and cannot complete them in a day ...... Deductions are also made from wages if the work is considered to have been done unsatisfactorily. Many people cannot therefore earn their full wages and are punished in various ways. In fact, the labourers have to spend their period of indenture in great trouble ....’
(i) What happened to the worker in a few days of joining work?
(ii) What happened to him when he was not able to complete the work allotted to him?
(iii) How were the workers punished when the work was considered to have been done unsatisfactorily?
Ans. On arrival, laboureres found living and working conditions very harsh, very different from what they were told and they had hardly any legal rights. In a few days, the worker found his hands bruised and he could not work for a week. He was prosecuted and sent to jail for 14 days. Deductions were made from their salary if their work was considered unsatisfactory.
Q.17. Why did thousands of people flee from Europe to America in the 19th century? Give any three reasons. [2010, 2011(T-1)]
(i) Scrapping of Corn Laws, led to inability of British agriculture to compete with imports.
(ii) Thousands of people were left unemployed due to agricultural land lying uncultivated. So people migrated in thousands, crossed oceans to find employment and a better future.
(ii) There was demand for labour in America as labour supply was short. So people migrated to America in the 19th century.
Q.18. Write any three factors responsible for indentured labour migration from India. [2010(T-1)]
Ans. The three factors responsible for indentured labour migration from India were :
(i) In mid-19th century cottage industries had declined in India and land rents had risen.
(ii) Lands were cleared for mines and plantations. This affected the poor who could not pay their rents.
(iii) Unemployment led to deep indebtedness of the workers and in the end they were forced to migrate in search for work.
To escape from poverty or oppression in their home villages, many Indians migrated to other lands.
Q.19. What is meant by the Bretton Woods System? Explain. [2010, 2011(T-1)]
Ans. The Bretton Wood system was an attempt to preserve economic sterility and full employment in the industrial world. It established the International Monetary Fund to deal with external surpluses and deficits of its member states. The Bretton Wood system was based on fixed exchange rates. In this system, national currencies, for example, the Indian rupee, were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $ 35 per ounce of gold. It linked natural currencies and monetary system.
Q.20. Explain three major features of global agricultural economy that had taken shape towards the close of nineteenth century. [2010(T-1)]
Ans. By 1890, a global agricultural economy had taken shape, accompanied by complex changes in labour movement patterns, capital flows, ecologies and technology.
(i) Food no longer came from a nearby village or town, but from thousands of miles away.
(ii) It was not grown by a peasant tilling his own land, but by a recently arrived agricultural worker.
(iii) Food was transported by railways built for that very purpose, and by ships manned by lowpaid workers from Southern Europe, Asia, Africa and the Caribbean.
Q.21. What was Rinderpest? How did Rinderpest change the economy of the African society? [2011(T-1)]
Ans. In Africa, in the 1880s a fast-spreading disease of cattle plague or rinderpest had a terrible impact on economy of African society. It was carried by infected cattle imported from British Asia to feed the Italian soldiers stationed in East Africa. It killed 90 per cent of the cattle of Africa. The loss of cattle destroyed African livelihoods. Planters, mine owners and colonial governments now monopolised remaining cattle resources. Africans were forced into the labour market. Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.
Q.22. “Food offers many examples of long distance cultural exchange.” Justify this statement. [2011(T-1)]
Ans. Traders and travellers introduced new crops to the lands they travelled. Even ‘ready’ foodstuff in distant parts of the world might share common origins. It is believed that noodles travelled west from China to become spaghetti. Arab travellers/traders took Pasta to fifth-century Sicily, an island in Italy. Similar foods were also known in India and Japan. This suggests the possibilities of long-distance cultural contact even in the pre-modern world. Many of our common foods such as potatoes, soya, groundnuts, maize, tomato, chillies had their origin in the Americas.
Long Answer Questions
Q.23. Describe in brief the world economic conditions of the post-First World War period. (2010)
Ans. Post-war recovery proved to be difficult. Britain, which was the world’s leading economy in the pre-war period, in particular faced grave crises. Britain found it difficult to recapture its earlier position of dominance in the Indian market and to compete with Japan internationally. Both India and Japan had developed industries during the war, Britain owed a great war debt to the USA, as it had borrowed liberally from the US.
The war had also led to an economic boom as there had been a large increase in demand for production and employment. When the war boom ended it led to huge job losses as the government reduced war expenditures. In Britain, one in every five workers was without a job. Many agricultural economies also faced a crisis. Before the war, eastern Europe was a major supplier of wheat in the world market. War disrupted production and as a result wheat production in Canada, Australia and America expanded dramatically. But when the war ended, wheat production in Europe revived and there was a glut of wheat output. Grain prices fell, incomes declined and farmers fell deeper into debt. Only the US was able to recover quickly.
Q.24. Why was the ninteenth century indenture described as a ‘New System of Slavery’? [2011 (T-1)]
Ans. In the 19th century, hundreds of thousands of Indian and Chinese labourers went to work on plantations, in mines and in road and railway construction projects around the world. In India, indentured labourers were hired under contracts which promised return travel to India after five years of work. Recruitment was done by agents engaged by employers. Many migrants agreed to take up work, hoping to escape poverty or oppression in their home villages. Agents gave them false information about final destinations, modes of travel or nature of the work and living and working conditions. Often the migrants were not even told that they would have to make a long sea voyage. Sometimes agents even forcibly abducted less willing migrants. On arrival at the plantations, labourers found conditions to be very different from what they were told. Living and working conditions were harsh, they had few legal rights. It was indeed a new system of slavery which was condemned by Indian nationalist leaders in 1900 as abusive and cruel. It was abolished in 1921.
Q.25. Explain any four causes of the Great Depression. [2010, 2011 (T-1)]
Ans. The reasons for the Great Depression of 1929 are :
(i) The post-war world economy was very fragile. First, agricultural overproduction remained a problem. It was made worse by falling prices. There was a glut in the market pushing down prices even further and farm produce rotted due to lack of buyers.
(ii) In the mid-1920s many countries had financed their investments through loans from the US. US overseas lenders panicked at the first sign of trouble. In the first half of 1928, US overseas loans had amounted to over $ 1 billion. A year later it was one quarter of that demand. Countries dependent on US loans now faced an acute crisis.
(iii) Withdrawal of US loans led to failure of major banks in Europe and collapse of currencies like the British pound sterling. In Latin America and elsewhere it intensified the slump in agriculture and raw material prices.
(iv) The US attempt to protect its economy in the depression by doubling import duties also dealt a severe blow to world trade.
Q.26. Explain any four measures adopted by America for post-war recovery. [2010 (T-1)]
Ans. One measure adopted by America for post-war recovery was :
(i) Mass production; it became a feature of industrial production in US. An example is Henry Ford, the car manufacturer. He adopted ‘assembly line’ method for faster and cheaper production. Car production increased from 2 million in 1919 to more than five million units in 1929.
(ii) Similarly, there was boom in production of refrigerators, washing machines, all purchased through a ‘‘hire purchase’ system, credit repaid in weekly or monthly installments.
(iii) There were large investments in housing and household goods which created a cycle of higher employment and incomes, rising consumption demand, more investment.
(iv) The US resumed exporting capital to the world in 1923. US exports and imports boosted European recovery and world trade and income growth over the next six years.
Q.27. How far is it correct to say that “The First World War was the first modern industrial war.” Explain. [2010 (T-1)]
Ans. The First World War was really the first modern industrial war. It involved the world’s leading industrial nations. These nations harnessed the vast powers of modern industry to inflict the greatest destruction on their enemies. Machine guns, tanks, aircraft, chemical weapons were used on a massive scale. Millions of soldiers recruited, from around the world, were moved to the front lines on large ships and trains. The scale of death and destruction — 9 million dead, 20 million injured — was unthinkable before the industrial age, without the use of industrial arms.
Q.28. “The indentured labour gave rise to a new culture in the Carribean islands.” Justify this statement with any four suitable examples. [2010 (T-1)]
Ans. The Indian indentured labour in the Caribbean developed new forms of individual and collective self-expression, mixing different cultural forms, old and new :
(i) In Trinidad the annual Muharram procession was transformed into a notorious carnival called ‘‘Hosay’’ (for Imam Hussain) in which workers of all religions and races joined.
(ii) In the same way, the protest religion of Rasta Farianism (made famous by the Jamaican regge star, Bob Morley) reflected the social and cultural links with Indians migrants to the Caribbean.
(iii) ‘‘Chutney Music,’’ popular in Trinidad and Guyana, is another expression of the new culture.
(iv) Many indentured workers stayed on after their contracts ended. This fusion was a result of things from different places getting mixed, losing their original characteristics and becoming something new. Consequently, there are large communities of Indian descent in these countries. Famous examples are the Nobel Prize winning writer V.S. Naipaul and West Indies cricketers like Shivnarine Chanderpaul and Ramnaresh Sarwan.
Q.29. The Economic Depression of 1929 proved less grim for urban India. Explain with four examples. [2011 (T-1)]
Ans. The depression was less grim for urban India.
(i) Those who received fixed incomes in form of rents or salaried employees found themselves better off.
(ii) Everything cost less
(iii) Industrial investment also grew as the
(iv) Government extended tariff protection to industries under pressure of nationalist opinion.
Q.30. Discuss the factors that led to the end of Bretton Woods system and the beginning of globalization. [2010, 2011 (T-1)]
(i) End of Bretton Woods came with the US dollar no longer commanding confidence in the world’s principal currency. From 1960’s the rising cost of overseas investment weakened the US’s finances and competitive strength. It could not retain its value in relation to gold. It led to the collapse of the system of fixed exchange rates and the introduction of floating exchange rates.
(ii) In 1970’s international financial system also changed. Developing countries were now forced to borrow from western commercial banks and private lending institutions instead of international institutions. This led to periodic debt crisis in the developing world, increased poverty in Africa and Latin America. By 1970s MNCs also began to shift production operations to low-wage Asian countries.
(iii) China which had been cut off from the post-war world economy, since its revolution in 1949, has now come back into the fold of the world economy. Its new economic policies and the collapse of the Soviet Union has led to it. Low cost structure of the Chinese economy, its low wages, has flooded the world market with Chinese goods.
(iv) The relocation of industry to low wage countries has stimulated world trade and capital flows. The world’s economic geography has been transformed as countries such as India, China and Brazil have undergone rapid economic transformation.
Q.31. What is meant by globalization? Describe the three types of movements or flows within international economic exchange. [2011 (T-1)]
Ans. See Ans. No. 1 Short Answer Type Question.
Q.32. What were the Corn Laws? How did the abolition of Corn Laws affect the people of England? [2011 (T-1)]
Ans. See Ans. No. 15 , Short Answer Type Question.
Q.33. How did the global transfer of diseases in the pre-modern world help in the colonisation of the Americas. [2011 (T-1)]
Ans. European conquest of Americas was not just a result of superior firepower. It was mainly because of germs such as those of smallpox that they carried on their person. America’s inhabitants had no immunity against these diseases that came from Europe. Smallpox in particular proved a deadly killer. Once introduced, it spread deep into the continent, ahead even of any Europeans reaching there. It killed and decimated whole communities, paving the way for conquest. The European conquerors were immune to diseases such as smallpox.
Q.34. Explain why economy of USA was strong in the early 1920s? Would you agree that the roots of the Great Depression lay in this ‘boom’. Give reasons for your answer. [2011 (T-1)]
Ans. The first World War helped boost the U.S. economy. The most important feature of U.S. economy in the 1920s was the mass production. Mass production lowered costs and prices of engineered goods. This led to higher wages and manifold increase in the purchasing power of workers. The housing and consumer boom of the 1920s created the basis of prosperity in the U.S. This created a cycle of higher employment and incomes, rising consumption demands more investment and more employment and incomes. Overproduction led to fall in prices of goods. With the fall in prices, U.S. banks had also slashed lending and called bank loans. Farms could not sell their harvests, households were ruined and businesses collapsed.
Q.35. What was the impact of the First World War on the socio-economic conditions of the world. Describe any four points. [2011 (T-1)]
(i) During the war, industries were restructured to produce war-related goods. Entire societies were also reorganised for war — as men went to battle, women stepped in to undertake jobs that earlier only men were expected to do.
(ii) Most of the killed and maimed were men of working age. With fewer members within the family, household incomes declined after the war.
(iii) Economic powers like Britain and France declined after the war. The war transformed the U.S. from being an international debtor to an international creditor.
(iv) The war had led to an economic boom, that is, to a large increase in demand, production and employment. When the war boom ended, production contracted and unemployment increased.