The emergence of political constraints on domestic adjustment after WW II
A) mandated a return to rigidly fixed exchange rates.
B) mandated a return to successful floating rates from the 1930s.
C) was not influenced by the emergence of mass-based democracies.
D) ruled out a return to rigidly fixed exchange rates.
E) weakened the gold standard during a fundamental exchange disequilibrium.

Question

Quizplus · Accepted Answer

The emergence of political constraints after WW II ruled out a return to rigidly fixed exchange rates as governments needed flexibility to pursue domestic policy goals. This led to the adoption of a system of managed or flexible exchange rates.

The Emergence of Political Constraints on Domestic Adjustment After WW