The Bretton Woods Agreement was finalised in July 1944 at Bretton Woods in New Hampshire, USA. It established the International Monetary Fund and the World Bank to preserve global economic stability and full employment in the industrial world. These institutions also dealt with external surpluses and deficits of member nations, and financed post-war reconstructions.

The three types of movements or flows within the international economic exchange are trade flows, human capital flows and capital flows or investments. These can be explained as—the trade in agricultural products, migration of labour, and financial loans to and from other nations.
India was a hub of trade in the pre-modern world, and it exported textiles and spices in return for gold and silver from Europe. Many different foods such as potatoes, soya, groundnuts, maize, tomatoes, chillies and sweet potatoes came to India from the Americas after Columbus discovered it.
In the field of labour, indentured labour was provided for mines, plantations and factories abroad, in huge numbers, in the nineteenth century. This was an instrument of colonial domination by the British.
Lastly, Britain took generous loans from USA to finance the World War. Since India was an English colony, the impact of these loan debts was felt in India too. The British government increased taxes, interest rates, and lowered the prices of products it bought from the colony. Indirectly, but strongly, this affected the Indian economy and people.

The Great Depression was a result of many factors:
→ Prosperity in the USA during the 1920s created a cycle of higher employment and incomes. It led to rise in consumption and demands. More investment and more employment created tendencies of speculations which led to the Great Depression of 1929 upto the mid-1930s.
→ Stock market crashed in 1929. It created panic among investors and depositors who stopped investing and depositing. As a result, it created a cycle of depreciation.
→ Failure of the banks. Some of the banks closed down when people withdrew all their assets, leaving them unable to invest. Some banks called back loans taken from them at the same dollar rate inspite of the falling value of dollar. It was worsened by British change in policy to value pound at the pre-war value.

G-77 countries is an abbreviation for the group of 77 countries that demanded a new international economic order (NIEO); a system that would give them real control over their natural resources, without being victims of neo-colonialism, that is, a new form of colonialism in trade practised by the former colonial powers.
The G-77 can be seen as a reaction to the activities of the Bretton Woods twins (the International Monetary Fund and the World Bank) because these two institutions were designed to meet the financial needs of industrial and developed countries, and did nothing for the economic growth of former colonies and developing nations.

Q.1: - What was the Bretton wood system?
 (a) Post war the military system
 (b) Post war political system
 (c) Post war international economic system
 (d) None of these
 
Q.2: - What did indentured labour mean?
 (a) Cheap Labour (b) Free Labour
(c) Bonded Labour (d) None of these

Q.3: - What were ‘Canal Colonies’?
 (a) Large Colonies (b) Sea Ports
 (c) Large Canals (d) Irrigated areas
 
Q.4: - Which food traveled west from china to be called “Spaghetti’?
 (a) Soya (b) Groundnuts
 (c) Potato (d) Noodles
 
Q.5: - Which disease spread like wild fire in Africa in the 1890’s?
 (a) Cattle plague (b) Small pox
 (c) Pneumonia (d) None of these
 
Q.6: - Which was the Tabled city of gold?
 (a) Peru (b) Mexico
 (c) El Doeodo (d) Spain
 
Q.7: - Who adopted the concept of assembly line to produce automobiles? 
(a) Samuel Morse (b) Henry Ford
 (c) T. Cuppla (d) Imam Husain
 
Q.8: - The Descendants of indentures workers is a Noble Prize winning writer is-
 (a) Bob Morley (b) V. S. Naipaul
 (c) Amartya Sen (d) Ram Naresh Sarwan
 
Q.9: - The great Depression begin in
 (a) 1927 (b) 1928 (c) 1929 (d) 1930
 
Q.10: - The Chutney music popular in-
 (a) North America (b) South America
 (c) Japan (d) China
 
Q.11: - Rinderpest is a?
 (a) Cattle disease in Africa (b) Cattle disease in China
 (c) Cattle disease in India (d) Cattle disease in Russia
 
Q.12: - Which of the following is not a economic exchange?
 (a) Flow of Labour (b) Flow of Capital
 (c) Flow of Knowledge (d) Flow of Trade 
 
 Answer Key of Multiple Choice Questions
1. ( c ) 2. ( c ) 3. ( d ) 4. ( d ) 5. ( a ) 6. ( c ) 7. ( b ) 8. ( b ) 9. ( c ) 10. ( b ) 11. ( a ) 12. ( c ) 

1. Trade Surplus – Britain had a Trade Surplus with Indian. Britain used this Surplus to balance its trade deficit with other countries.
2. Home Charges – Britain’s trade Surplus in India also helped to pay the so called home charges that included private remittance home by British officials and traders, interest payments on India’s external debt and pensions of British officials in India.
3. Major Supplier of cotton – India remained a major supplier of raw cotton to British which was required to feed the cotton textile industry of Britain.
4. Supplier if indenture workers – Many indenture workers from Bihar, U.P., central India migrated to other countries to work in mines and plantations.

1. The international monetary system is the system linking national currencies and monetary system.
2. The Briton woods system was based on fixed exchange rates. In this system the national currencies were pegged to the dollar at a fixed exchange rate.
3. The Bretton woods system inaugurated an era of unprecedented growth of trade and incomes for the western industrial nations.

1. Food could be imported into Britain more cheaply than it would be produced within the country.
2. British agriculture was unable to compete with imports. Vast Areas of land were left uncultivated and people started migrating to cities or other countries.
3. As food prices fell, consumption in Britain rose. Faster industrial growth in Britain also led to higher incomes and therefore more food imports.
4. Around the world in eastern Europe, Russia, America and Australia land were cleared and food production expanded to meet the British demand.