The harshness and extreme unpopularity of the -war communism' system imposed in Russia from 1918 to 1921 led the Soviet leadership to adopt the New Economic Policy (NEP) in March of 1921. Under the NEP, the prodnalog system of tax in kind was begun, and a semi-market economy was allowed to develop alongside government control of what Lenin had called the "commanding heights industries?' When the NEP was abandoned in 1927, the state declared it a failure as a result of several adverse events: the scissors crisis, the goods famine, and speculation by "NEPmen."

The scissors crisis of 1923 was caused by high industrial prices relative to agricultural prices. When these two sets of prices are graphed, the wide disparity resembles an open pair of scissors. The government had been spurring industry but felt that this price disparity had to be immediately addressed. To do so, it adopted policies favoring agriculture. There is some speculation by economists, however, that the scissors would have closed on their own.

The goods famine occurred at roughly the same time. Because of burgeoning industry, demand for industrial and consumer products skyrocketed. The state could not produce goods equal to demand, forcing prices up. In the midst of shortages, the state found itself in a losing contest with "NEPmen," small entrepreneurs who sold goods at prices often higher than those of the state. NEPmen were seen as capitalists who sought to return the Soviet state to its position as lapdog to the Western capitalist states. Since the state could not produce or profit as well as the NEPmen, it adopted measures to put the NEPmen out of business. By 1926, speculating on pricing was a crime. As a result, profits and incentives had fallen, and the speculation crisis was somewhat alleviated.

Select the sentence from the third paragraph which describes an action undertaken by the Soviet government.





The speculation by economists refers to which of the following beliefs?

A. The government’s belief that the crisis would one day have ended, even if the government had not moved to support agriculture
B. Economists’ belief that the government was mistaken in supporting agriculture over industry
C. Economists’ belief that the scissors crisis could have been averted without government intervention
D. Economists’ belief that the price disparity would have eventually resolved itself without action by the government
E. The government’s belief that agricultural and industrial prices would have balanced each other, but not in time to stop a crisis from occurring



Which of the following would make the most appropriate title for this passage?

A. The Fall of the New Economic Policy
B. An End to WarCommunism
C. Why the New Economic Policy Failed
D. Three Crises that Ended an Era
E. Soviet Economic Systems: an Overview

Consider each of the choices separately and select all that apply.

It can be inferred from the passage that each of the following accurately represent the author’s opinions EXCEPT

A. NEPmen were like capitalists, who sought to earn their fortune at the expense of others and brought about the downfall of the NEP.
B. The government was partially responsible for the goods famine, due to its inability to control supply and demand.
C. The war communism system caused the scissors crisis by spurring agriculture prices.