Under the Bretton Woods system, a country with a balance of payments deficit

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Under the Bretton Woods system, a country with a balance of payments deficit was allowed to devalue its currency if deflationary policies failed to eliminate the deficit. However, devaluation was not allowed under any circumstance for countries with balance of payments surpluses. The U.S. government also provided loans to countries with deficits to help them finance their deficits in the short term, but this was not the only option available to deficit countries.

Under the Bretton Woods System, a Country with a Balance