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The 'Triffin Paradox' May Be Explained by the Following

Question 23

Multiple Choice

The 'Triffin Paradox' may be explained by the following:

A) To avoid a liquidity shortage, the U.S. was required under Bretton Woods to run a balance of payments surplus, which would boost the value of the U.S. dollar, cause speculation of a revaluation and create a liquidity surplus
B) To avoid a liquidity shortage, the U.S. was required under Bretton Woods to run a balance of payments surplus, which would boost the value of the U.S. dollar, cause speculation of a revaluation and increase the liquidity shortage
C) To avoid a liquidity shortage, the U.S. was required under Bretton Woods to run a balance
D) To avoid a liquidity surplus, the U.S. was required under Bretton Woods to run a balance of payments surplus, which would boost the value of the U.S. dollar, cause speculation of a revaluation and create a liquidity surplus

Correct Answer: