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Give two examples of different types of global exchanges which took place before the seventeenth century, choosing one example from Asia and one from the Americas.

The Two different types of global exchanges which took place before the seventeenth century. They are , silks from Asia to Europe and precious metals from Europe to Asia.

Food stuff such as potatoes, soya, groundnuts, maize, tomatoes, chillies, sweet potatoes,were exported from America to Asia and Europe after Christopher Columbus discovered the vast continent.


Explain how the global transfer of disease in the pre-modern world helped in the colonisation of the Americas.

The Portuguese and Spanish conquest and colonisation of America was decisively under way by the mid-sixteenth century. European conquest was not just a result of superior firepower. In fact, the most powerful weapon of the Spanish conquerors was not a conventional military weapon at all. It was the germs such as those of smallpox that they carried on their person. Because of their long isolation, America’s original 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 and colonization.


e) The decision of MNCs to relocate production to Asian countries.

a) When the Corn Laws were abolished, food could be imported into Britain more cheaply than it could be produced within the country. British agriculture was unable to compete with imports. Vast areas of land were now left uncultivated, and thousands of men and women were thrown out of work. They flocked to the cities or migrated overseas.

b) Rinderpest , a cattle disease, arrived in Africa in the late 1880s. It was carried by infected cattle imported from British Asia to East Africa. Entering Africa in the east, rinderpest moved west ‘like forest fire’, reaching Africa’s Atlantic coast in 1892. It reached the Cape five years later. Along the way rinderpest killed 90 per cent of the cattle. The loss of cattle destroyed African livelihoods. Planters, mine owners and colonial governments now successfully monopolised what scarce cattle resources remained, to strengthen their power and to force Africans into the labour market. Control over the scarce resource of cattle enabled European colonisers to conquer and subdue Africa.

c) The First World War (1914-18) was mainly fought in Europe. To fight the war, millions of soldiers had to be recruited from around the world and moved to the frontlines on large ships and trains. The scale of death and destruction – 9 million dead and 20 million injured – was unthinkable. Most of the killed and maimed were men of working age. These deaths and injuries reduced the able-bodied workforce in Europe. With fewer numbers within the family, household incomes declined after the war.

d) The depression immediately affected Indian trade. India’s exports and imports nearly halved between 1928 and 1934. As international prices crashed, prices in India also plunged. Between 1928 and 1934, wheat prices in India fell by 50 per cent. Peasants and farmers suffered more than urban dwellers. Though agricultural prices fell sharply, the colonial government refused to reduce revenue demands. Peasants producing for the world market were the worst hit.

e) The relocation of MNCs to low-wage countries stimulated world trade and capital flows. 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.


Give two examples from history to show the impact of technology on food availability.

Improvements in transport, like faster railways, lighter wagons and larger ships helped move food more cheaply and quickly from faraway farms to final markets.

Secondly, the development of a new technology, like refrigerated ships, enabled the transport of perishable foods over long distances.


What is meant by the Bretton Woods Agreement?

The Bretton Woods Agreement established the International Monetary Fund (IMF) to deal with external surpluses and deficits of its member nations. The World Bank) was set up to finance post war reconstruction. The post-war international economic system is also often described as the Bretton Woods system.

The international monetary system is the system linking national currencies and monetary system. The Bretton Woods 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.


Explain the three types of movements or flows within international economic exchange. Find one example of each type of flow which involved India and Indians, and write a short account of it.

Historically, fine cottons produced in India were exported to Europe. With industrialisation, British cotton manufacture began to expand, and industrialists pressurised the government to restrict cotton imports and protect local industries. Tariffs were imposed on cloth imports into Britain. Consequently, the inflow of fine Indian cotton began to decline.

Indigo used for dyeing cloth was another important export for many decades. Opium shipments to China grew rapidly from the 1820s to become, for a while, India’s single largest export. Britain grew opium in India and exported it to China and, with the money earned through this sale, it financed its tea and other imports from China.

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.

Thus Britain had a ‘trade surplus’ with India. Britain used this surplus to balance its trade deficits with other countries. By helping Britain balance its deficits, India played a crucial role in the late-nineteenth-century world economy.


Explain the causes of the Great Depression.

The Great Depression began around 1929 and lasted till the mid- 1930s.
The depression was caused by a combination of several factors. The post-war world economy was fragile.


To start with agricultural overproduction remained a problem. This was made worse by falling agricultural prices. As prices slumped and agricultural incomes declined, farmers tried to expand production and bring a larger volume of produce to the market to maintain their overall income. This worsened the glut in the market, pushing down prices even further. Farm produce rotted for a lack of buyers.

Secondly in the mid-1920s, many countries financed their investments through loans from the US. While it was easy to raise loans in the US when the going was good, US overseas lenders panicked at the first sign of trouble and withdrew the loan facilities. The withdrawal of US loans affected much of the rest of the world. In Europe it led to the failure of some major banks and the collapse of currencies such as the British pound sterling. In Latin America and elsewhere it intensified the slump in agricultural and raw material prices.

The US attempt to protect its economy in the depression by doubling import duties also dealt another severe blow to world trade.

During the Depression period most parts of the world experienced catastrophic declines in production, employment, incomes and trade. Agricultural regions and communities were the worst affected. This was because the fall in agricultural prices was greater and more prolonged than that in the prices of industrial goods.


Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins?

The IMF and the World Bank, called the Bretton Woods twins commenced financial operations in 1947. Decision-making in these institutions were controlled by the Western industrial powers. The US had an effective right of veto over key IMF and World Bank decisions. The Bretton Woods system saw the unprecedented growth of trade and incomes for the Western industrial nations .

Most developing countries did not benefit from the fast growth the Western economies experienced in the 1950s and 1960s. Therefore they organised themselves as a group – the Group of 77 (or G-77) – to demand a New International Economic Order (NIEO).

The NIEO meant a system that would give a country real control over its natural resources, more development assistance, fairer prices for raw materials, and better access for their manufactured goods in developed countries’ markets.

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