Beginning in the early 1970s, many nations abandoned their dollar standard and moved toward a system of:
A) fixed exchange rates based on gold.
B) fixed exchange rates based on the Deutsche Mark.
C) floating exchange rates.
D) real money systems in which currencies were backed by government bonds.

Question

Quizplus · Accepted Answer

Beginning in the early 1970s, many nations abandoned the fixed exchange rate system in which their currency was pegged to the value of the US dollar and instead adopted a floating exchange rate system, in which the value of their currency was determined by the market forces of supply and demand. This reduced the need for countries to hold large reserves of foreign currency to maintain a fixed exchange rate and allowed for greater flexibility in responding to economic conditions.

Beginning in the Early 1970s, Many Nations Abandoned Their Dollar