Week 8b

Question 1

• What caused the dollar gap after World War II?a. A surplus of US dollars in global marketsb. A shortage of US dollars needed to purchase American goods and rebuild economiesc. The collapse of the Bretton Woods systemd. The reduction in international trade agreements after the war

Answer 1

b

Question 2

• Why was the US dollar especially valuable after World War II?a. It was tied to silver, making it the only global currency.b. It was tied to gold under the Bretton Woods system, giving it strong purchasing power.c. It was the only currency accepted for international loans.d. It was used exclusively by European economies for trade.

Answer 2

b

Question 3

• What role did the Marshall Plan play in addressing the dollar gap?a. It encouraged European countries to adopt the gold standard.b. It provided US financial aid to Europe, increasing dollar availability.c. It reduced American exports to balance global trade.d. It discouraged American tourism to reduce dollar outflows.

Answer 3

b

Question 4

• How did post-war American tourism help close the dollar gap?a. By encouraging foreign tourists to visit the USb. By promoting the purchase of US-made souvenirs abroadc. By circulating dollars in foreign economies through spendingd. By funding international trade agreements

Answer 4

c

Question 5

• What was the primary cause of the US travel gap by the 1960s?a. American tourists spent significantly more abroad than foreign tourists spent in the US.b. US tourism policies discouraged international travel.c. European tourists outspent Americans within the US.d. American tourists avoided spending in European economies.

Answer 5

a

Question 6

• How did European economic recovery affect the US travel gap?a. European countries began relying more on American goods.b. European tourists increased their spending in the US.c. European economies strengthened, reducing their dependence on US spending.d. European currencies became tied to the US dollar, eliminating the gap.

Answer 6

c

Question 7

• What effect did the travel gap have on the US balance of payments?a. It improved the US balance of payments through surplus spending.b. It caused a significant deficit in the US balance of payments by 1964.c. It had no measurable impact on the balance of payments.d. It shifted global economic power away from the US.

Answer 7

b

Question 8

• What is one way the dollar gap showcased US economic power?a. By demonstrating the global dependency on US goods and dollarsb. By reducing the value of foreign currencies globallyc. By increasing European exports to the USd. By lowering US spending abroad

Answer 8

a

Question 9

• Why was the balance of payments deficit concerning for the US by the 1960s?a. It weakened the US dollar’s tie to gold.b. It reflected an unsustainable increase in domestic tourism.c. It threatened the economic stability of the Bretton Woods system.d. It caused the collapse of European economies reliant on US aid.

Answer 9

c

Question 10

• How did the Bretton Woods system contribute to the dollar gap?a. It removed the need for the US dollar in international trade.b. It overvalued foreign currencies, making dollars less accessible.c. It tied the US dollar to gold, increasing its value and global demand.d. It discouraged the circulation of US dollars abroad.

Answer 10

c

Question 11

• How did the spending habits of American tourists reflect US soft power?a. By demonstrating the strength of the US economy through lavish spendingb. By promoting cultural isolationism and reducing foreign influencec. By decreasing the dependency of European economies on the USd. By increasing foreign imports to the US economy

Answer 11

a

Question 12

• Which of the following best summarizes the relationship between the dollar gap and US tourism?a. Tourism increased the dollar gap by reducing European spending in the US.b. Tourism helped close the dollar gap by increasing dollar circulation abroad.c. Tourism had no impact on the dollar gap or balance of payments.d. Tourism widened the dollar gap by promoting reliance on the British pound.

Answer 12

b

Question 13

• How did the US balance of payments change as tourism spending increased abroad?a. It improved due to increased imports from Europe.b. It worsened as foreign spending in the US decreased.c. It remained stable despite fluctuating tourist spending.d. It shifted to a surplus, reducing economic concerns.

Answer 13

b

Question 14

• What role did American souvenir hunting play in global tourism?a. It discouraged local economic recovery by promoting imports.b. It acted as a cultural exchange that softened US foreign relations.c. It boosted local economies and symbolized US economic dominance.d. It created a dependency on American-made goods in foreign countries.

Answer 14

c

Question 15

• Why did European resentment toward American tourists grow during the post-war period?a. Tourists often flaunted their wealth and acted culturally insensitive.b. Americans spent too little money abroad to support local economies.c. European governments blamed tourists for rising inflation.d. Tourists encouraged US military intervention in European politics.

Answer 15

a