Question

The Bretton Woods system of fixed exchange rates collapsed because

A.inflationary U.S. monetary policy forced other countries to gain international? reserves, which led to recession in those countries.

B.inflationary U.S. monetary policy forced other countries to lose international? reserves, which led to inflation in those countries as well.

C.inflationary U.S. monetary policy forced other countries to gain international? reserves, which led to inflation in those countries as well.

D.inflationary U.S. monetary policy forced other countries to lose international? reserves, which led to recession in those countries.

When a country experiences a speculative attack on its? currency, it

A.loses international reserves and may be forced to devalue its currency.

B.loses international reserves and may be forced to revalue its currency.

C.gains international reserves and may be forced to devalue its currency.

D.gains international reserves and may be forced to revalue its currency

Answer 1

The Bretton Woods system of fixed exchange rates collapsed because

B.inflationary U.S. monetary policy forced other countries to lose international? reserves, which led to inflation in those countries as well.

Before Nixon finishing the convertibility of the dollar to a settled estimation of an ounce of gold, which was the Bretton Woods understanding, inflation was rising, perilously so. Kicking out a fundamentally ascribed an incentive for a gliding one took into account the period of skimming monetary standards.

Answer 2

A. loses international reserves and may be forced to devalue its currency

A currency crisis is a circumstance in which genuine uncertainty exists with respect to whether a nation's national bank has adequate remote trade stores to keep up the nation's settled conversion scale. The crisis is frequently joined by a speculative attack in the remote trade showcase. A currency crisis comes about because of constant adjust of installments shortages, and accordingly is additionally called an adjust of installments crisis. Regularly such a crisis finishes in a cheapening of the currency.