The collapse of the fixed exchange rate system has been traced to the:
A) U.S. macroeconomic policy package of 1965-1968.
B) inflexibility of the fixed exchange rate system that led to high unemployment.
C) Marshall Plan, under which the United States lent money heavily to European nations.
D) failure of the International Monetary Fund to impose monetary discipline.
E) increased taxes in the U.S. to finance its welfare programs.

Question

Quizplus · Accepted Answer

The collapse of the fixed exchange rate system has been traced to the U.S. macroeconomic policy package of 1965-1968. This package included deficit spending, increased government expenditures, and a devaluation of the dollar, which led to a loss of confidence in the U.S. economy and the fixed exchange rate system.

The Collapse of the Fixed Exchange Rate System Has Been