Answer to Question 1
d
Answer to Question 2
Following World War II, the Marshall Plan provided massive sums of money in direct
aid and loans to rebuild the European economic base destroyed in World War II. Given
the Marshall Plan's success in rebuilding much of Europe, U.S. political leaders
decided that the Southern Hemisphere nations that had recently been released from
European colonialism could also benefit from a massive financial infusion and rapid
economic development. Leaders of the developed nations argued that urgent problems
such as poverty, disease, and famine could be reduced through the transfer of finance,
technology, and experience from the developed nations to lesser-developed
countries. From this viewpoint, economic development is the primary way to solve the
poverty problem. Ideas regarding underdevelopment were popularized by President
Harry S. Truman in his 1949 inaugural address. According to Truman, the nations in the
Southern Hemisphere were underdeveloped areas because of their low gross
national product (today called gross national incomeGNI). Truman believed that it
was necessary to assist the people of economically underdeveloped areas to raise their
standard of living, by which he meant material well-being that can be measured by the
quality of goods and services that may be purchased by the per capita national income.
After several decades of economic development fostered by organizations such as the
United Nations and the World Bank, it became apparent by the 1970s that improving a
country's GNI did not tend to reduce the poverty of the poorest people in that country.
In fact, global poverty and inequality were increasing, and the initial optimism of a
speedy end to underdevelopment faded.
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