The Confidence Problem of the Bretton Woods Systems Articulated by Robert

question 134

Multiple Choice

The confidence problem of the Bretton Woods systems articulated by Robert Triffin refers to

• A) the unwillingness of central banks to accumulate currency for fear of not being able to convert it to gold in case a run on the banks occurs.
• B) consumer fear of stock market instability.
• C) producer fear of rising wages.
• D) the lack of convertibility of gold into silver.
• E) low consumer spending because of balance of payment crises.

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Definitions:

World Price

The international market price of a good or service, influenced by global supply and demand conditions.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price in a given time period.

World Price

The international price at which goods are traded between countries, affecting domestic markets.

No-Trade Prices

Prices at which market participants are not willing to trade, indicating either a lack of demand at higher prices or a lack of supply at lower prices.