Economic History Quiz: Trade and Technology
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Questions and Answers

What was the approximate percentage decrease in the distance between London and Bombay after the opening of the Suez Canal?

  • 60%
  • 41% (correct)
  • 26%
  • 18%

What impact did advancements in military technology have on peripheral economies during the period discussed?

  • They facilitated the transfer of technology to peripheral economies.
  • They promoted the development of independent trade policies.
  • They resulted in the 'opening' or conquest of these economies. (correct)
  • They led to increased economic cooperation.

What was the primary effect of the removal of the Corn Laws in Britain?

  • Increased prices of domestically produced wheat.
  • A ban on wheat imports.
  • Increase in tariffs on wheat imports.
  • Reduction in tariffs on wheat imports. (correct)

Which of the following best describes the trend in shipping costs for coal and wheat during the period described?

<p>Dramatic decrease (A)</p> Signup and view all the answers

What was the main impact of the opening of the Panama Canal in 1914 on the distance between New York and San Francisco?

<p>Reduced the distance by 60%. (B)</p> Signup and view all the answers

Which technological advancement significantly improved letter transmission speeds around 1850, though initially at a high cost?

<p>The telegraph. (C)</p> Signup and view all the answers

What was a general trend in trade policy among industrializing economies, especially until the 1870s?

<p>Removal of mercantilist policies and lowering of tariffs. (D)</p> Signup and view all the answers

Which of the following countries is NOT included in the 'Rich Europe' category, according to the text?

<p>Spain (D)</p> Signup and view all the answers

How did trade contribute to the Industrial Revolution through the supply of raw materials?

<p>By facilitating a large increase in raw material imports needed for manufacturing, such as cotton. (B)</p> Signup and view all the answers

What was a key effect of improved market integration during the Industrial Revolution related to cotton?

<p>The price of cotton in Britain (Liverpool) became very similar to that in India (Gujarat). (A)</p> Signup and view all the answers

According to the provided material, what is a major factor that caused British cotton cloth prices to fall?

<p>Technological advances in British manufacturing. (B)</p> Signup and view all the answers

How did access to foreign markets impact British industrial output during the Industrial Revolution?

<p>It reduced pressure on prices by allowing excess output to be sold abroad which helped prevent large price decreases (B)</p> Signup and view all the answers

What happened to the British terms of trade from 1800 to 1830 based on the provided information?

<p>They decreased, indicating more favorable conditions for its trading partners initially. (A)</p> Signup and view all the answers

How did the 'periphery' benefit from industrialization and trade?

<p>Through moderately rising raw material prices and falling prices for industrial goods (C)</p> Signup and view all the answers

What impact did improved packing technologies for cotton bales have on trade?

<p>They improved the rate of market integration and lowered the costs of goods. (C)</p> Signup and view all the answers

What was the relationship between the price of raw cotton and the price of British cotton cloth during the Industrial Revolution?

<p>The price of British cotton cloth fell below the price of Indian handmade cotton without a corresponding increase in raw cotton prices (D)</p> Signup and view all the answers

According to Bernhofen and Brown's analysis of Japan's trade after 1854, what was a significant pattern observed in its trade?

<p>Japan imported more cotton yarn than it exported. (A)</p> Signup and view all the answers

What was a key lesson Japan learned from its experience with Commodore Perry's forced opening?

<p>The need for a strong military and navy for political survival and policy independence. (A)</p> Signup and view all the answers

According to the information provided, what was a motivation for Japan's industrialization?

<p>To strengthen its military and achieve policy independence from foreign powers. (D)</p> Signup and view all the answers

What was a consequence of Japan's push for industrialization and military strength?

<p>Japan became an imperial power in regions like Korea. (C)</p> Signup and view all the answers

What specific economic effect happened in Japan after 1854?

<p>The prices of imported goods fell, and exported goods rose. (B)</p> Signup and view all the answers

Prior to 1913, what was a common form of money, as indicated in the text?

<p>Commodity money, such as silver or gold coins. (A)</p> Signup and view all the answers

What is mentioned about the bimetallic standard?

<p>It struggled to keep the market prices of gold and silver constant. (C)</p> Signup and view all the answers

What was one significant aspect of the gold standard before 1913?

<p>It created stable exchange rates for international trade and investments. (C)</p> Signup and view all the answers

Which European power held significant colonial interests in Indochina?

<p>France (B)</p> Signup and view all the answers

What percentage of the Earth's surface was controlled by Europe by 1914?

<p>84% (B)</p> Signup and view all the answers

Which region was NOT primarily an object of European colonialism during the late 19th and early 20th centuries?

<p>South America (B)</p> Signup and view all the answers

Which of the following best describes the impact of new technologies on colonialism?

<p>They enabled deeper penetration and increased control over territories. (C)</p> Signup and view all the answers

Which of the following was a method used to draw indigenous populations into market production in European colonies?

<p>Imposing taxation requiring payment in money. (C)</p> Signup and view all the answers

Which nation was NOT mentioned as expanding their influence in Asia?

<p>United States (A)</p> Signup and view all the answers

Which of these regions was NOT subjected to 'internal' imperialism?

<p>The North African Region of Morocco (A)</p> Signup and view all the answers

What was a key consequence of the gold standard for international trade and finance?

<p>Fixed exchange rates and lower transaction costs. (C)</p> Signup and view all the answers

What did 'mint parity' legally define under the gold standard?

<p>The legally fixed rate of a currency's value in terms of gold. (C)</p> Signup and view all the answers

The Monroe Doctrine played a role in America's relationship with European colonialism by:

<p>Partially safeguarding American territories from European control, while also opening markets. (A)</p> Signup and view all the answers

What was crucial for ensuring trust in the convertibility of money to gold under the gold standard?

<p>A minimum ratio between bank deposits, notes and their gold reserves. (B)</p> Signup and view all the answers

Why did adherence to the gold standard become a 'seal of approval' for countries?

<p>It was a sign of solid monetary policy and balanced budgets. (C)</p> Signup and view all the answers

Which action was crucial for the international 'regime' of fixed exchange rates under the gold standard?

<p>Freely tradable gold within and between countries. (C)</p> Signup and view all the answers

Besides England, which country adopted the gold standard next with a significant time gap?

<p>Portugal (C)</p> Signup and view all the answers

What did Germany use to back their new national currency (Mark) with gold when switching to the gold standard?

<p>Reparations from the Prussian-French war of 1870-71. (A)</p> Signup and view all the answers

What was an important rule required by the gold standard, particularly in peripheral countries, regarding monetary policy?

<p>The careful avoidance of fiscal dominance by note issuing banks. (C)</p> Signup and view all the answers

What was a primary factor that made societies vulnerable to external influence?

<p>Their dependence on external forces. (B)</p> Signup and view all the answers

Which period does the work 'The Age of Empire' by E.J. Hobsbawm focus on?

<p>1875-1914 (A)</p> Signup and view all the answers

What aspect of globalization is discussed by Sharp and Weisdorf in their 2013 work?

<p>The wheat trade between North America and Britain. (C)</p> Signup and view all the answers

Which of the following authors primarily focuses on the history of the international monetary system?

<p>Barry Eichengreen (D)</p> Signup and view all the answers

What is the main subject of Kaukiainen's 2001 article?

<p>Improvements in the speed of information transmission. (C)</p> Signup and view all the answers

What is the primary focus of the work by Federico and Tena-Junguito (2017)?

<p>The gains from trade and openness between 1800 and 2010. (B)</p> Signup and view all the answers

Which of these references discusses the idea of a 'Great Convergence' and its connection to information technology?

<p>Baldwin (2016) (A)</p> Signup and view all the answers

Which of these works analyses when industrialization took off across several countries?

<p>Bentzen, Kaarsen and Wigender (2013) (C)</p> Signup and view all the answers

Flashcards

Trade Liberalization

The process of reducing restrictions on international trade, such as tariffs and quotas, to encourage more free exchange of goods and services.

Mercantilism

A policy that promotes national economic interests by restricting foreign trade, often through tariffs or quotas.

Corn Laws

Laws that regulated the import and export of grain, especially wheat, in Britain. They aimed to control the price of grain and protect domestic producers.

Tariff

A tax imposed on goods imported into a country, used to protect domestic industries and generate government revenue.

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Quota

A limit on the quantity of goods that can be imported into a country, used to protect domestic industries from foreign competition.

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Free Trade

The belief that free trade benefits all participating countries by allowing specialization, efficiency, and lower prices.

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Comparative Advantage

The idea that countries should focus on producing and exporting goods where they have a comparative advantage, meaning they can produce them more efficiently than others.

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Shorter Trade Distances

The opening of new trade routes, like the Suez and Panama Canals, reducing travel distances and transportation costs.

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Raw materials in the Industrial Revolution

Raw materials like cotton were crucial for the Industrial Revolution. The need for these materials drove trade, increasing the demand for imports.

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Global markets and Industrial production

The ability to sell goods abroad allowed factories to produce more without worrying about domestic market saturation. This helped prices stay stable and encouraged further production.

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Terms of Trade

The price of exported goods compared to imported goods. If the price of exports is high, the terms of trade are favorable.

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Technological advancements and price of cotton

The Industrial Revolution led to a decrease in the price of British cotton goods due to advances in technology, while the price of raw cotton remained relatively stable. This benefitted Britain, who could produce cheaper goods.

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Market integration

The Industrial Revolution led to increased trade and a more interconnected global market. This resulted in a decrease in transportation costs and a more stable supply of materials.

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Benefits to exporting nations

The Industrial Revolution's innovations, like cheaper and faster shipping, benefitted raw material exporting nations. They could sell their goods at higher prices, leading to economic growth.

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British terms of trade and the periphery

British terms of trade fell initially, but stabilized later. This was due to decreasing prices of manufactured goods. The 'periphery' (raw material exporters) benefitted from increased raw material prices and cheap industrial goods.

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The Industrial Revolution and global power

The Industrial Revolution led to a shift in global power. Britain, with its advanced technology and manufacturing capability, became a major economic force.

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Gold Standard

A period in economic history (before 1914) where many countries pegged their currency to a fixed amount of gold, creating stable exchange rates and facilitating international trade.

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Industrialization

The process by which a country focuses on developing its manufacturing capabilities and industries, often with the goal of increasing economic growth and national power.

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Trade Pattern

The pattern of trade between countries, showing which goods are exported and imported in larger quantities.

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Revealed Comparative Advantage

The ability to produce goods and services at a lower opportunity cost compared to other countries.

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Civil War

A war fought within a single country, usually between different factions or groups.

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Foreign Influence

A situation where a country's policies are influenced or controlled by other countries, often through economic or military pressure.

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Military Buildup

The development of armed forces, including the army and navy, to strengthen a country's military power.

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Gold Reserve Ratio

The ratio between gold reserves held by a bank and its total deposits and notes in circulation, ensuring the bank's ability to convert money into gold.

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Mint Parity

The fixed exchange rate determined by the legal value of a currency in relation to a specific weight of gold.

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Fiscal Dominance

A situation where a government's spending is influenced by the need to maintain stability of the gold standard, rather than prioritizing its own economic goals.

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Gold Standard Regime

The international system of fixed exchange rates established by the gold standard, facilitating cross-border trade and finance.

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Good Housekeeping

The practice of maintaining sound monetary policies, avoiding excessive government spending and money printing, to ensure stability of the gold standard.

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Free Tradability of Gold

The ability for individuals and banks to freely buy and sell gold, enabling gold reserves to be acquired and money to be converted into gold.

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The Gold Standard Era

The historical period between the late 19th century and the early 20th century, characterized by widespread adoption of the gold standard.

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Globalization

The period when societies became more interconnected through trade, communication, and cultural exchange, leading to significant transformations.

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External Forces on Societies

The impact of foreign forces, such as trade ships, on societies that were relatively isolated, leading to changes that often benefited the invaders.

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Age of Empire (1875-1914)

The period in history marked by significant growth in international trade and economic exchange, fueled by technological advancements and political changes.

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Improvements in Information Transmission

The increasing speed and efficiency of communication, leading to faster dissemination of information and knowledge.

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Great Convergence

The convergence of income levels and living standards between different countries, often driven by globalization and economic growth.

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Global Economic History

The study of historical patterns of economic development and global connections.

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Imperialism

The European powers' expansion of their control over territories worldwide, particularly in Africa, Asia, and the Americas, during the 19th century.

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Monroe Doctrine

A policy of the US, adopted in 1823, that declared external interference by European powers in the Americas would be seen as an act of aggression against the US.

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Market Production

The process by which indigenous populations were drawn into producing goods for the global market, often through the use of forced labor or taxes.

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US Expansion

The expansion of the US's territory through buying or conquering land, including the acquisition of territories from France, Spain, Russia, and Mexico.

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European Expansion

The process by which European countries increased their control over the world, with the proportion of Earth's surface under their control rising from 37% in 1800 to 84% in 1914.

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Technology and Colonialism

The impact of technologies like railways, telegraphs, and weaponry on European colonialism, facilitating more efficient control and exploitation of colonies.

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Internal Imperialism

The internal expansion of nations within their own borders, often through conquering indigenous populations, as seen in the US, Argentina, Australia, and Russia.

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Indirect Influence

The extension of political, economic, and cultural influence over a territory without direct colonial rule, as seen in the relationship between Siam/Thailand and European powers.

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Study Notes

History of Economics and the Economy IV

  • By 1913, international commodity markets were far more integrated than in 1750.
  • World trade accounted for a higher share of global output.
  • A wider range of goods, including those with high bulk-to-value ratios, were transported internationally.
  • This interconnectedness, coupled with industrialization in northwest Europe and its offshoots, led to a stark distinction between industrialized and peripheral economies.
  • Dennis Robertson termed this the "Great Specialization.".

First Globalization - What?

  • Outline and increase in trade shares in outputs and consumption/inputs.
  • Globalization over 5 centuries illustrates the "trade openness index."
  • This index is defined as the sum of world exports and imports divided by world GDP.
  • Trade grew faster than world GDP, especially between the 1840s and the early 1900s.
  • This period saw a rise of the "progress narrative."
  • The period from 1918 to 1950 caused doubt about this.

Definitions of Economic Globalization Market Integration

  • Globalization in economics is equivalent to market integration.
  • Integration areas are geographical areas where market exchange occurs.
  • These areas can differ by commodity and time.
  • Globalization includes exchanges of various products: specific commodities, everyday goods, and services.
  • It also encompasses the movement of factors of production, such as labor (migration), capital (foreign investment), and land (settlement and conquest).

What Inhibits Market Integration?

  • Factors like transaction costs (information costs, risk of non-payment, property rights, and transport costs) and financial risks (credit risk, lack of credit, and opportunity costs).
  • Trade costs act as reasons for differences in prices.
  • A model of market integration demonstrates how trade costs lead to differences in prices between locations.
  • Trade costs can inhibit market integration, leading to price disparities.

Examples of Price Convergence

  • Price ratios for everyday goods like wheat illustrate instances of price convergence over time.
  • The ratio of US to UK wheat prices has historically exhibited fluctuations.
  • There have been periods of relatively similar prices, although not always accompanied by significant trade.
  • Trade and policy laws played a part in the price fluctuations.

Great Specialization – What?

  • Europe ('core') mainly exported manufactured products.
  • Other regions ('periphery') mainly exported primary goods like wheat.
  • Regional participation in global trade emphasized this specialization pattern.
  • Data from the late 19th and early 20th centuries illustrate this trend.

Extremely Specialized “Peripheral Countries”

  • Peripheral countries often rely on a small number of export commodities.
  • Examples of commodities include wheat, tobacco, and others.
  • Data on export concentration and commodity profiles in peripheral countries from 1870 to 1913 further illustrate this pattern of specialization.

First Globalization and Great Specialization – Why?

  • Industrialization origins in the UK, spreading to other countries.
  • Technological advancements, leading to increased efficiency and output.
  • Changes in labor demographics in urban centers, contributing to industrial growth.
  • Industrialization and labor reorganization promoted global trade.

Trade Policy Liberalization

  • Many industrialized countries reduced trade barriers like tariffs.
  • The belief in free trade gained more traction and influenced many policies of the time.
  • Many countries attempted to "open" up peripheral economies in the process.

International Investment

  • International investments helped extend transport infrastructures and supported agricultural exports.
  • These investments are linked to the gold standard.
  • Greater opportunities for return spurred foreign investment in regions experiencing economic development like the US, and other areas in Europe.

International Migration

  • International migration increased during the 19th and early 20th centuries.
  • The reasons of migration included economic opportunities.
  • Migration was linked to industrialization and imperialism, in that they were both influenced by each other in a multitude of ways.

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Test your knowledge on the economic impacts of trade advancements and military technology from the opening of the Suez Canal to the Industrial Revolution. This quiz covers significant historical events and their effects on global shipping and trade policies. Perfect for students studying economic history.

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