If a currency's par rate (defined as United States (US)dollars per unit of foreign currency)was ________ the equilibrium rate and this persisted, then under the Bretton Woods System, the country would be allowed a currency ________.
A)above; devaluation
B)equal to; devaluation
C)below; devaluation
D)above; overvaluation

Question

Quizplus · Accepted Answer

Under the Bretton Woods System, if a currency's par rate was above the equilibrium rate, it indicated that the currency was overvalued. To correct this imbalance, the country would be allowed a currency devaluation to bring its currency's value in line with the market equilibrium.

If a Currency's Par Rate (Defined as United States (US)dollars