Solved

Under the Bretton Woods Agreement, If a Country Other Than

Question 7

Multiple Choice

Under the Bretton Woods agreement, if a country other than the United States ran a trade deficit, downward pressure was exerted on the currency's exchange rate. In order to maintain the agreed-upon exchange rate, what must this foreign central bank do?


A) It must purchase the excess supply of dollars with its own currency.
B) It must purchase the excess supply of its own currency with dollars.
C) It must supply its own currency and demand dollars to create a surplus in the official reserve account that just equals its deficit on current and capital accounts.
D) Both b and c

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents