Dollar convertibility refers to
A)the ability to exchange dollars for any other currency.
B)the ability to convert dollars to commodities such as exported goods.
C)the ability of the World Bank to devalue the dollar.
D)the pricing of a barrel of oil in U.S.dollars.
E)the U.S.commitment to exchange gold for dollars.

Question

Quizplus · Accepted Answer

Dollar convertibility refers to the U.S. commitment to exchange gold for dollars. This means that foreign governments and central banks could exchange a fixed amount of U.S. dollars for gold, which made the U.S. dollar a strong and reliable currency in international trade. This system of dollar convertibility was ended in 1971, leading to floating exchange rates and the current system of monetary policy.

Dollar Convertibility Refers to