Question

How did the first Five-Year Plan strain China’s budget?
a. The government increased spending too fast to modernize its economy.
b. The government decreased spending too fast to modernize its economy.
c. The government had to subsidize its declining agricultural output.
d. The government had to subsidize its declining industrial output.

Answer 1

How did the first Five-Year Plan strain China’s budget?

a. The government increased spending too fast to modernize its economy.

The strain on national budget was due to the increase in fiscal expenditure, from 30.2% to 48%, through infrastructure loans.   

Answer 2

The correct option is "a. The government increased spending too fast to modernize its economy."

For many years, China has been implementing a series of five-year plans for its economic development. Under the leadership of Mao Zedong, China adopted the Soviet economic model. The first Five-Year Plan was implemented in the period 1953 - 1957. In this plan, priority is given to the field, which for Mao Tse-Tung would be the basis of industrialization. A radical agrarian reform was made that organized the peasants into cooperatives, the feudal privileges were extinguished and education became obligatory.