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53
What were the two major world problems at the time?
1) German forced to pay for WWI damages to Allied forces
-put a large strain on German economy
-Hyperinflation and unable to make payment schedule
-US attempted to give them large loan to stabilize the economy through the Dawes Plan
-Young Plan reduced the size of payments
2) Return to the Gold Standard
-would help fix exchange rates and prevent inflation
-Britain was a fan b/c it would return them to pre-war financial dominance; actually backfired since Pound was over-valued at the mint (fucked them over)
-US could have helped if they allowed the gold into the US
-this would have increased US price levels
-chose to "sterilize" or stop the gold inflow
-US did not take into account international backlash
-put a large strain on German economy
-Hyperinflation and unable to make payment schedule
-US attempted to give them large loan to stabilize the economy through the Dawes Plan
-Young Plan reduced the size of payments
2) Return to the Gold Standard
-would help fix exchange rates and prevent inflation
-Britain was a fan b/c it would return them to pre-war financial dominance; actually backfired since Pound was over-valued at the mint (fucked them over)
-US could have helped if they allowed the gold into the US
-this would have increased US price levels
-chose to "sterilize" or stop the gold inflow
-US did not take into account international backlash
Flashcard info:
Author: savhighsmith
Main topic: Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 15.11.2010