The fixed exchange rate system set up in the 1940s was the

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The fixed exchange rate system set up in the 1940s was the Bretton Woods system, named after the conference that established it. Under this system, currencies were pegged to the US dollar and the US dollar was pegged to gold. This created a fixed exchange rate system that lasted until the 1970s. Purchasing power parity is a different concept that relates to the relative value of currencies based on their ability to purchase goods and services. The gold standard is an earlier system where currencies were directly pegged to gold. The European Union euro system is a more recent development, established in 1999, where participating countries share a common currency.

The Fixed Exchange Rate System Set Up in the 1940s