Consequences of World War I
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Questions and Answers

What was the consequence of World War I on the international payments system?

  • Distortions in production and trade (correct)
  • Free movement of factors
  • Proper functioning of the international payments system
  • Limited intervention of the government in the economic life

    • Which country became the first economic power of the world after World War I?

  • Belgium
  • USA (correct)
  • France
  • Germany

    • What were the sanctions imposed on Germany by the Allies after World War I?

  • Proper functioning of the international payments system, limited intervention of the government, free movement of factors, distortions in production and trade
  • Payments in kind, territorial cessions, demilitarization, payments in cash (correct)
  • Free movement of factors, limited intervention of the government, proper functioning of the international payments system, protectionism
  • Distortions in production and trade, poor functioning of the international payments system, workers and soldiers' claims, protectionism

    • What did J.M. Keynes propose regarding reparations after World War I?

    <p>Reparations are economically irrational and politically imprudent</p> Signup and view all the answers

    Which two countries insisted on receiving enough reparations to cover their debts with the UK and USA?

    <p>France and Belgium</p> Signup and view all the answers

    What was the consequence of World War I on the role of governments in economic decision making processes?

    <p>Governments assumed an important role in economic decision making processes</p> Signup and view all the answers

    What was the main reason for the occupation of the Ruhr area by France and Belgium?

    <p>Germany's refusal to pay reparations</p> Signup and view all the answers

    What was the result of the Dawes Plan in 1924?

    <p>Reduction of reparation payments and international loan grant</p> Signup and view all the answers

    What was the effect of the German hyperinflation on the middle classes?

    <p>Loss of value in their savings</p> Signup and view all the answers

    What were the two main explanations for the German hyperinflation?

    <p>Budget deficit and balance of payments</p> Signup and view all the answers

    What were the reasons behind the increase in prices during the German hyperinflation?

    <p>Monetization of the deficit and increasing cost of imports</p> Signup and view all the answers

    What was the outcome of creating the rentenmark during the mark stabilization process?

    <p>Return to the Gold Standard</p> Signup and view all the answers

    What happened to the German mark in November 1923 as part of mark stabilization?

    <p>Fixed exchange rate with respect to the dollar</p> Signup and view all the answers

    What led to an increase in the supply of marks as mentioned in the text?

    <p>Reparation payments and trade deficit</p> Signup and view all the answers

    What was the main impact of hyperinflation on imports?

    <p>Imports became more expensive due to currency depreciation</p> Signup and view all the answers

    What measure did Germany adopt to rebalance its budget during mark stabilization?

    <p>Creation of the rentenmark</p> Signup and view all the answers

    What was the main impact of the Treaty of Versailles on Germany?

    <p>Forced industrialization</p> Signup and view all the answers

    What was the effect of the poor functioning of the international payments system after WWI?

    <p>Distortions in production and trade</p> Signup and view all the answers

    What did J.M. Keynes propose regarding the war reparations after WWI?

    <p>Reparations that are economically irrational and politically imprudent</p> Signup and view all the answers

    What was the consequence of the Allies imposing sanctions on Germany after WWI?

    <p>Demilitarization of Germany</p> Signup and view all the answers

    What was the role of USA after WWI in terms of global economy?

    <p>Became the first economic power of the World</p> Signup and view all the answers

    How did the role of governments change in economic decision making processes after WWI?

    <p>Governments assumed an important role in economic decision making processes</p> Signup and view all the answers

    What was the impact of the French and Belgian occupation of the Ruhr area in 1923?

    <p>It caused German workers to start a strike.</p> Signup and view all the answers

    What was the effect of German hyperinflation on the middle classes?

    <p>It caused their savings to lose value due to inflation</p> Signup and view all the answers

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