Under the Bretton Woods system, US dollars were freely available at a fixed rate relative to the price of gold, which had the effect of fixing all exchange rates with respect to each other. In a series of steps between 1971 and 1973, the Nixon administration first backed the United States away from these currency responsibilities, and then reneged on them altogether.

Question

Quizplus · Accepted Answer

The Bretton Woods system established fixed exchange rates between currencies and the US dollar, which was convertible to gold at a fixed rate. The Nixon administration's actions between 1971 and 1973, known as the Nixon Shock, effectively ended this system by suspending the gold convertibility of the dollar and leading to floating exchange rates.

Under the Bretton Woods System, US Dollars Were Freely Available