What was the 'gold-exchange standard' established by the Bretton Woods agreement?
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Correct answer: The dollar was fixed to gold at $35/ounce, with other currencies fixed to the dollar
The U.S. guaranteed the dollar's value in gold to provide stability. This allowed international trade to expand rapidly because merchants and governments had confidence in the fixed value of the exchange medium.
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More Bretton Woods System questions
- Which prominent economist represented the United Kingdom at Bretton Woods and proposed a global currency called the 'Bancor'?
- The 'Nixon Shock' of 1971 effectively ended the Bretton Woods System by:
- Why did the Bretton Woods System face a 'liquidity problem' in the 1960s known as the Triffin Dilemma?
- The Bretton Woods System was designed to avoid the 'beggar-thy-neighbor' policies of the 1930s, which included:
- Which of the following was a major criticism of the Bretton Woods institutions by developing 'Global South' nations?
- What role did the General Agreement on Tariffs and Trade (GATT) play alongside the Bretton Woods System?