The Bretton Woods agreement
A) set up a fixed exchange rate system that was maintained by purchases and sales of gold.
B) denounced the establishment of the World Bank.
C) set up a fixed exchange rate system maintained by purchases and sales of currency.
D) encouraged countries to devalue their currencies to help their trade deficits.

Question

Quizplus · Accepted Answer

The Bretton Woods agreement established a fixed exchange rate system that was maintained by purchases and sales of currency, specifically the US dollar, which was convertible to gold. Countries agreed to maintain a fixed exchange rate within 1% of their chosen rate by buying or selling their own currency on foreign exchange markets. The system only collapsed in 1971 when the US abandoned the gold standard.

The Bretton Woods Agreement