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World War 1
- WW1 started with the assassination of Franz Ferdinand by a Serbian Nationalist
- It ended With a win for the Allies and the dissolvement of The Ottoman and A.H Empire
- Due to Germany's allies seizing to exist, Germany had to pay a debt to the allies it couldn't afford
- Blockades during the war harmed economies in Europe, giving the U.S a chance to overtake Britain and become the biggest economy
- Economies became more connected due to the cruciality of international trade during the war
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Rise of Communisms
- Karl Marx pioneered communism the 18th century through publications like Das Kapital and The Communist Manifesto
- During the Russian revolution Russia's monarchy was overthrown and replaced with the world's first communist government led by Vladimir Lenin
- The U.S fostered a "policy of containment" in which it quell communist uprisings
- While Capitalist economies grew due to commerce and investments, Communist states Crumbled economically due to their reliance in their own industries
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Treaty Of Versailles
- Due to its surrender in WW1 and its allies vanishing, Germany was expected to fully pay back the cost of the war
- In total, the Treaty of Versailles made Germany pay 33 billion U.S dollars, plus Germany lost 13 percent of its territory to the allies
- Due to Germany printing out money to repay its debt, it experienced hyperinflation in which decades of people's savings became worth less than a day's pay
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Stalin
- Joseph Stalin became the dictator of the U.S.S.R shortly after Lenin's death
- Stalin's five-year plan aimed to develop heavy industry and collectivized agriculture, which increased the U.S.S.R's industrial output by 118%
- To defend itself from the U.S, The U.S.S.R spent around 20% of its GDP yearly on the arms race.
- The focus on economic aid to other communist states, plus the arms race left the soviets behind economically and technologically compared to the rest of the world
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The Great Depression
- Started due to a crash in the U.S stock market which made millions of investors pull out of the stock market
- Effects of the crash were felt worldwide due to Global GDP dropping by 15%, international trade dropping by 50%, and unemployment rising up to 33% in some countries
- Almost all countries shifted to a more controlled economy and set up economic relief programs so a stock crash in a single country wouldn't lead the entire world to such a major economic crisis ever again
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Hitler
- Hitler became the leader of the Nazi party and Germany's dictator
- Hitler blamed all of Germany's misfortunes on Jewish people, which lead to the discrimination of Jewish people before and in concentration camps
- Hitler ignored the treaty of Versailles by beefing up thier military, and invading 11 different countries without any consequence until Germany started to pressure Poland
- Hitler put tariffs on imports and privatized industries which miraculously improved the German economy
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World War 2
- After Germany's invasion of Poland The allies declared war on Germany and its allies, The U.S.S.R, Italy, and later Japan
- Germany managed to take most of Europe, and started a surprise invasion on the U.S.S.R
- instead of fining the losing countries, the allies took them over and gave them economic aid, plus economic reforms
- After the Japanese attack on pearl harbor, the U.S launched a city-wiping bomb on 2 Japanese cities, many countries started spending on their own nuclear programs
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World Bank
- The World Bank is a global financial organization that offers grants and loans to governments of low- and middle-income nations in order for them to carry out major financial projects.
- World bank loans 20 billion USD each year
- These loans help countries grow their economy and keep people fed and employee
- Almost every single country is showered in debt, this keeps good relations between countries and balances out the global economy
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Bretton Woods Confrence
- The 44 Allied nations who were invited to the Conference came to an agreement on a new economic order and system of international cooperation that helped rebuild nations after the devastation of World War 2 and promote long-term global growth.
- The conference also played a role in the development of the IMF and the Global Bank.
- The conference also started a transition from colonial economic globalization where countries traded via mercantilists systems to contemporary globalization
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International Monetary Fund
- The IMF includes 189 member nations that promote international monetary cooperation, and financial stability, ease trade between nations, encourage high employment rates, and long-term economic growth, and lessen poverty worldwide.
- The IMF also controls the value of every currency in the world, like when it made the Russian ruble worthless after the invasion of Ukraine
- The highest recession after the great depression was the great recession which GDP only went down 4.3 percent at its peak
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General Agreement On Tariffs And Trade
- The GATT is a treaty that lowers barriers to trade by getting rid of or cutting back on quotas, tariffs, and subsidies. -The GATT encourages countries and businesses to participate in international trade and also outsource their labor to an international labor force.
- Increasing dependence on foreign trading partners as a result of encouraging international trade can result in product shortages and/or sanctions crippling a country economically
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World Trade Organization
- The GATT was succeeded by the WTO, an intergovernmental organization with 164 member states.
- In cooperation with the U.N., the organization creates, updates, and enforces the rules that govern international trade.
- WTO oversees 96% of international trade
- Encourages free trade, by restricting tariffs, quotas, and subsidies like the GATT
- Makes International trade transparent, dependable, and non-discriminatory
- Has the power to impose sanctions and restrict trade against a country