Until the 1970s, most industrialized countries used some form of fixed exchange rate, such as the Bretton Woods system which fixed the value of the US dollar to gold and other currencies fixed their values to the US dollar. It wasn't until the collapse of this system in 1971 that major currencies began to float freely against each other.

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Until the 1970s

Question 30

Multiple Choice

Until the 1970s

A) all major currencies were allowed to float.
B) fixed exchange rates consistently led to economic prosperity.
C) most industrialized countries used some form of fixed exchange rate.
D) all international transactions were made with gold.

Correct Answer: