Question

What factors led to the end of bretton woods and and beginning of globalisation?

Answer 1

...Woods system are :
(i) A decline in economic power of the USA.
(ii) Change in the international financial system.
(iii) Unemployment in industrialized countries.

(iv) Shifting of production enterprises.
(v) Changes in China.

(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) A collapse of fixed exchange rates on floating exchange rates.
(ii) Change in the international financial: The International Monetary Fund and the World Bank were created to meet the financial needs of the industrial countries. The international financial system changed, and developing countries were forced to borrow from western commercial banks.
(iii) Unemployment in industrialized countries: Industrial world was hit by unemployment. The number of unemployed started rising and people
trudged long distances looking for any work they could find.
(iv) Shifting to production enterprises:MNCs shifted their production units to Asian countries because of cheap labor and low wages.
(v) Changes in China: China became an attractive destination for investment by foreign MNCs.

Answer 2

1.$\textbf{ Change in the international financial }$ :

a. IMF and World Bank were setup to meet the financial needs of industrial countries.

b. Many developing countries were forced to borrow from western commercial bank.

2.$\textbf{ Change in China}$ :

Foreign MNCs were attracted towards China due to cheap labour cost.

3. $\textbf{Unemployment in industrial countries}$ :

The creating world was badly hitted by the problem of unemployment. This leads to movement of people.

4.$\textbf{ Decline in economic power of the USA}$ :

a. Confidence of US dollar was no more longer.

b. Collapse of fixed exchange rate on floating exchange rate.

5.$\textbf{ Shifting to production enterprises }$ :

Asian countries were became an attractive place for MNCs for production due to cheap labour and low wages.