The Bretton Woods system
A) allowed for market-determined exchange rates.
B) ended the use of the gold standard in all participating countries.
C) led to a dramatic increase in the U.S. balance of payments deficit.
D) resulted in the rapid increase of the U.S. gold supply in the 1960s.
E) All of the above.

Question

Quizplus · Accepted Answer

The Bretton Woods system, established in 1944, fixed currencies to the US dollar, which was convertible to gold. This system led to a strain on the U.S. gold reserves as countries began to demand gold for their dollar holdings, contributing to a balance of payments deficit for the U.S. This system did not allow for market-determined exchange rates (A is incorrect), it did not end the use of the gold standard but rather defined the dollar in terms of gold (B is incorrect), and it resulted in a decrease, not an increase, of the U.S. gold supply in the 1960s (D is incorrect).

The Bretton Woods System