Global Economic Crisis Practice Test

A historian writing about the Great Depression in Europe argues that the gold standard acted as a “policy straitjacket”: governments prioritized maintaining fixed exchange rates and balanced budgets, which encouraged austerity and high interest rates even as unemployment soared. The excerpt adds that countries leaving gold earlier could devalue, stimulate exports, and recover sooner. Which development best supports the author’s claim about the effects of abandoning the gold standard?

A secondary source excerpt observes that international attempts to coordinate a response to the Great Depression were limited: creditor nations resisted debt relief, states prioritized domestic recovery, and conferences produced few binding agreements. The author argues that this failure of cooperation contributed to the erosion of the interwar diplomatic order. Which development is the best example of the limited international economic cooperation described?