Social Science (087) — AI-generated practice question

Indian peasants sold their gold and jewellery during the Great Depression because agricultural prices crashed sharply — wheat prices fell 50% between 1928 and 1934 — yet the colonial government refused to reduce revenue demands. Burdened with mounting debts and falling incomes, peasants were forced to sell their precious metals to meet expenses.

However, when this gold was exported, it boosted Britain's foreign exchange reserves, helping Britain stabilise its economy and speed up its recovery. The Indian peasant gained nothing — their debts remained, land was mortgaged, and poverty deepened. As economist John Maynard Keynes noted, Indian gold exports promoted global recovery but did little for the peasants themselves.

Source: Chapter 3, Section 3.5 — India and the Great Depression

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What examiners look for (3 marks):

• Point 1 (1 mark): Why peasants sold gold — falling prices + unchanged revenue demands → debt → forced sale of jewellery/metals.
• Point 2 (1 mark): How gold export helped Britain — boosted British recovery/exchange reserves.
• Point 3 (1 mark): Why it did NOT help Indian peasants — debts, poverty, mortgaged land continued.

Key tip: Always quote Keynes's observation — it directly appears in the textbook and signals that you've read it carefully. Don't confuse "export of gold helping recovery" with "peasants benefiting" — the contrast is the whole point of the question.