What steps were taken by the economists and politicians of the world to meet the global economic crisis that arose after the Second World War ?
OR
"Despite stiff competition from machine-made thread, the Indian handloom production not only survived, but also saw a steady growth in the 20th century." Explain reasons in favour of your answer.
CBSE Class X Social Science SA ( 3 marks)
Answers
The steps taken by economists and politicians were as follows :
(i) Bretton Woods Conference established IMF to deal with external surplus and deficit of its members. (ii) The World Bank was set up to finance post-war reconstruction.
(iii) Bretton Woods System was based on fixed exchange rates.
(iv) Dollar was anchored to gold at a fixed price.
OR
Reasons for growth of handloom production are :
(i) Adopting technological changes by the weavers helped to increase production and compete with mill sector without raising the costs.
(ii) Those who catered to the rich always had a demand for their goods. Examples : Banarasi and Baluchari Sarees.
(iii) Mills could not imitate specialized weavers. especially these who made sarees with intricate borders, lungis and handkerchief.
Answer:
The Second World War caused an immense amount of economic devastation and social disruption. To preserve economic stability and full employment in the industrial world a Conference was held in 1944 at Bretton Woods, USA. The Bretton Woods Conference established the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (Popularly known as World Bank) to deal with external surpluses and deficits of its member nations and to finance post-war reconstruction.
The post-war international economic system is also often described as the Bretton Woods System. The Bretton Woods System was based on fixed exchange rates. In this system, national currencies were pledged 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.
The IMF and the World Bank were designed to meet the financial needs of the industrial countries. But as Europe and Japan rapidly rebuilt their economies, they grew less dependent on the IMF and the World Bank. Thus from the late 1950s the Bretton Woods institutions began to shift their attention more towards developing countries. The developing countries which were former colonies came under the guidance of international agencies dominated by the former colonial powers.