Foreign exchange prices became volatile during the 1970s mainly because of:

Question

Quizplus · Accepted Answer

The demise of the Bretton Woods system of fixed exchange rates was the main reason for the volatility in foreign exchange prices during the 1970s. Under this system, currencies were pegged to the US dollar, which itself was linked to gold. However, the US government's decision to abandon the gold standard in 1971 led to the collapse of the Bretton Woods system, and allowed exchange rates to fluctuate freely. This caused significant volatility in currency markets.

Foreign Exchange Prices Became Volatile During the 1970s Mainly Because