Under the Bretton Woods system,if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy,the IMF would agree to a(n)____________.
A) currency devaluation
B) increase in employment
C) increase in output
D) increase in interest rates
E) increased tariffs

Question

Quizplus · Accepted Answer

Under the Bretton Woods system, if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy, the IMF would agree to a currency devaluation. Devaluation would lower the value of the country's currency, making its exports cheaper and imports more expensive. This would lead to an increase in demand for domestic goods, which would help to reduce the trade deficit.

Under the Bretton Woods System,if a Country Developed a Permanent