The main criticism most contemporary economists would make of the Bretton Woods agreement is that it
A) was inherently inflexible and thus not adaptable to changing economic conditions.
B) was based on the false assumption that the ability of one country to compete with another changes over time.
C) depended too heavily on adherence to the gold standard.
D) demanded a fundamental realignment of currencies for which most countries were unprepared.
E) meant that the only way to balance imports and exports was through the use of tariffs and quotas.

Question

Quizplus · Accepted Answer

The Bretton Woods agreement fixed exchange rates to the US dollar and made it the world's reserve currency. This became inflexible as it did not adjust to changes in the economic condition of different countries. As a result, it created economic imbalances that could not be rectified, leading to the eventual collapse of the system in the early 1970s.

The Main Criticism Most Contemporary Economists Would Make of the Bretton