Under Bretton Woods,
A) any foreign country cannot devalue its currency against the dollar in conditions of "fundamental disequilibrium."
B) any foreign country could devalue its currency against the dollar in conditions of "fundamental disequilibrium," but the system's rules did not give the United States the option of devaluing against foreign currencies.
C) any foreign country could devalue its currency against the dollar in conditions of "fundamental disequilibrium," and the system's rules did give the United States the same option of devaluing against foreign currencies.
D) the U.S. could devalue its currency against the foreign currencies in conditions of "fundamental disequilibrium."
E) any foreign country can revalue its currency against the dollar in conditions of "fundamental disequilibrium."

Question

Quizplus · Accepted Answer

Under the Bretton Woods system, foreign countries could devalue their currencies against the dollar in conditions of "fundamental disequilibrium," but the system did not provide the United States with the reciprocal option to devalue the dollar against foreign currencies. This was part of the asymmetry of the Bretton Woods system, where the dollar was the central reserve currency.