Social Science (087) — AI-generated practice question

Before the breakdown of the Bretton Woods system, developing countries could borrow from international institutions like the IMF and World Bank, which offered stable, long-term loans aimed at development. After the breakdown, they were forced to borrow from Western commercial banks and private lenders.

This made them more vulnerable because:

• Commercial banks charged higher interest rates, increasing the repayment burden.
• Loans were given on stricter, profit-driven terms, not developmental needs.
• This led to periodic debt crises, especially in Africa and Latin America, causing lower incomes and increased poverty.

Source: Chapter 3, Section 4.4 – End of Bretton Woods and the Beginning of 'Globalisation'

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The examiner wants three clear points matching the 3 marks: (1) the shift from institutional to commercial borrowing, (2) the harder/costlier terms of commercial loans, and (3) the consequence — debt crises, poverty, lower incomes. The textbook explicitly states this caused "periodic debt crises" and "lower incomes and increased poverty, especially in Africa and Latin America" — quote or closely paraphrase this for full marks. Avoid generic statements; stay anchored to the passage.