Question

Which of the following was not a structural weakness in the world economy in 1929, leading to the Great Depression? A. Low prices in the agricultural sector Instability and interdependence of national currencies.B. Low rate of long-term capital investment.C. Europe needed United States credit and also goods so it spent American loans to get American goods and this was inefficient. D. The increased German reparation payments as a result of the Dawes Plan.

Answer 1

Answer: D. The increased German reparation payments as a result of the Dawes Plan.

Explanation:

The Dawes Plan (1924) was an agreement for Germany’s payment of reparations following World War I. It established that payments had to be of 1 billion gold marks in the first year and grow to 2.5 billion marks by 1928. But it worked so well that by 1929 the Young Plan reduced the reparations demanded of Germany to 121 billion gold marks, around $29 billion, to be paid over 58 years.