The term 'adjustable peg' in the context of Bretton Woods meant that:
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Correct answer: Exchange rates were fixed but changeable under 'fundamental disequilibrium'
While stability was the goal, the system allowed for occasional devaluations or revaluations. If a nation's economy was in permanent crisis, the IMF would permit a one-time adjustment to its currency's fixed value.
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More Bretton Woods System questions
- Why did France, under Charles de Gaulle, famously challenge the Bretton Woods System in the 1960s?
- Following the collapse of the Bretton Woods exchange rate system in 1973, most major currencies moved to:
- What is the primary difference between the World Bank and the IMF?
- In the Bretton Woods era, what was the primary reason for 'capital controls' (restrictions on moving money in/out of a country)?
- The 'Special Drawing Right' (SDR) was created by the IMF in 1969 to:
- Which of the following was a key reason for the U.S. support of the Bretton Woods System?