Question

Briefly answer:

1. Give three key weaknesses in the international economy as of 1928. Explain how these weaknesses contributed to the international transmission of the global economy? Organize your thoughts around the US, Germany, France and Great Britain.

2. What was the trajectory of international “integration” between 1925 and 1929? Contrast the capital flows of the 1920s with those of the 1870- 1913 period.

3. While on the gold standard what is the monetary policy response to higher US interest rates?

4. What would happen if a country did not follow the US changes in interest rates? In other words, what policy options would allow a country not to follow the US interest rate policy as closely as under the gold standard.

Answer 1