Chapter 5

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36 Questions

What were the economic consequences of World War I?

Unbalanced economic growth and poor functioning of the international payments system

What characterized the post-World War I era in terms of economic decision making processes?

Distortions in production and trade and protectionism

What were the sanctions imposed on Germany by the Allies through the Treaty of Versailles?

Payments in kind, territorial cessions, and demilitarization

According to J.M. Keynes, what did he propose in 'The economic consequences of peace' in 1919?

Proposed reparations are economically irrational and politically imprudent

What was the main objective of the agrarian policy during the New Deal?

Reduction in cultivated land

What was the primary goal of the Industrial policy during the New Deal?

Beat deflation

What was the focus of Germany's Nazi regime in terms of economic policy during the Great Depression?

Full employment and autarky

What was the main objective of the Four-year plans implemented by the Nazi regime in Germany?

Centralized organization of the economic system

During which stage of World War II did the Allied counteroffensive take place?


What was the primary aim of the European Recovery Program (Marshall Plan) offered by the USA?

Finance the recovery of European countries and avoid shortages of international currencies

Which institution administered the European Recovery Program (Marshall Plan)?

Economic Cooperation Administration

What were the two phases of aid provided under the European Recovery Program (Marshall Plan)?

Food and basic products for the primary sector; fuel, raw materials, capital goods for the industry

Which factor contributed to the origins of the Great Depression?

Imbalanced economic growth and overproduction

What was a major crisis experienced by rich capitalist economies from 1929 to 1933?

The Great Depression

What were the economic policies implemented during the Great Depression?

Hoover administration's orthodox policies, New Deal's monetary and fiscal policies, and abandonment of the gold standard by some countries

What caused problems in agriculture during the Great Depression?

High productivity and falling prices leading to debt and loss of purchasing power

What resulted from the crash of the stock market during the Great Depression?

A banking crisis and a sharp decrease in the money supply

What were the effects of the Great Depression?

Reduction in production and unemployment, international trade, and capital markets

What was the priority given during the Industrial Revolution?

Heavy industry with under-financing of agriculture and consumption industries

What led to problems in income distribution during the Great Depression?

Increasing inequality and diversion of profits to the financial sector

What characterized economic growth during the 1920s, contributing to the origins of the Great Depression?

'Growing inequality' and 'tendency to overproduction'

What type of speculation was associated with a bubble in the stock market during the Great Depression?

Profits and stock market speculation

What was a characteristic effect of the Great Depression on international trade?

Reduction in international trade volume and disruption in global trade networks

What led to a sharp decrease in the money supply during the Great Depression?

The crash of the stock market

What was the outcome of France and Belgium's occupation of the Ruhr area in 1923?

The occupation led to a German worker strike

How did the Dawes Plan affect Germany's reparations payments?

It reduced the amount of reparations Germany had to pay

What economic challenge did Germany face in the late 1920s?

Hyperinflation and unprecedented price increases

What was the purpose of mark stabilization and the creation of the rentenmark?

To rebalance the budget and stabilize the currency

Why was the Gold Standard system abandoned during the post-war period?

Because it was no longer feasible to maintain currency convertibility

What was the primary objective of Germany's New Economic Policy (NEP) following the Bolshevik revolution?

To combine elements of private and public property

What characterized the Soviet Union's economic policy under Joseph Stalin?

Forced accumulation of capital by the state

What was the impact of war financing on Germany's economy during the 1920s?

High inflation and an increase in the fiscal deficit

How did the Treaty of Versailles link reparations to Germany's payment capacity?

By reducing reparation amounts based on Germany's payment capacity

What was the result of the German worker strike following the occupation of the Ruhr area?

The occupation became a symbol of national resistance

What was the impact of imbalanced economic growth on Germany during the 1920s?

War financing leading to high inflation and fiscal deficit increase

What characterized the post-war period in terms of Germany's ability to maintain currency convertibility?

Germany struggled to maintain currency convertibility at previous parity levels

Study Notes

  • Germany faced significant issues in meeting reparations payments as outlined in the Treaty of Versailles, leading to social unrest and the danger of a Bolshevik revolution.
  • Reparations were linked to Germany's payment capacity, and German governments did not prioritize stabilization and growth policies.
  • In 1923, France and Belgium occupied the Ruhr area to take possession of coal as payment, leading to a German worker strike.
  • The Dawes Plan was implemented in 1924, reducing the amount of reparations Germany had to pay and providing an international loan to foster trust in the German economy.
  • In the late 1920s, the German economy experienced hyperinflation, with prices increasing to an unprecedented degree, making it difficult for economic agents to make decisions.
  • Mark stabilization was necessary to rebalance the budget, leading to the creation of the rentenmark and the return of Germany to the Gold Standard.
  • The German economy was plagued by imbalanced economic growth during the 1920s, with war financing leading to high inflation and an increase in the fiscal deficit.
  • The Gold Standard system was abandoned during the post-war period due to the unbalanced economic growth and the inability to maintain currency convertibility to the previous parity.
  • The Soviet Union, following the Bolshevik revolution in 1917, implemented a New Economic Policy (NEP) that combined elements of private and public property, but was later abandoned in favor of central planning and the forced accumulation of capital by the state under Joseph Stalin.

Test your knowledge of industrial revolution policies and the Great Depression with this quiz. Explore topics such as 5-year plans, central planning, extensive growth models, and the causes of the Great Depression.

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