The Architects of the Bretton Woods Agreement Built Limited Flexibility

question 89

Multiple Choice

The architects of the Bretton Woods agreement built limited flexibility into the fixed exchange rate system in order to

• A) avoid high unemployment.
• B) facilitate competitive currency devaluations.
• C) widen balance-of-payments gap between countries.
• D) increase money supply and thereby price inflation.
• E) avoid balance-of-trade equilibrium between countries.

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Definitions:

Working Capital Assets

Current assets that are used in the operation of a business and can be converted into cash within a year.

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term financial health and operational efficiency.

Spontaneous Financing

Financing that occurs naturally as a company operates, such as trade credit that increases as sales increase.

Working Capital Accounts

Accounts that reflect a company's current assets minus its current liabilities, providing a snapshot of its short-term financial health and operational efficiency.