Under the Bretton Woods System Set Up at the End

question 20

Multiple Choice

Under the Bretton Woods system set up at the end of World War II, exchange rates were

• A) absolutely fixed, i.e., no deviations from parity were permitted.
• B) permitted to vary 1 percent above or below parity.
• C) permitted to vary 2¼ percent above or below parity.
• D) permitted to vary 10 percent above or below parity.

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Definitions:

Annual Interest Rate

The percentage increase in money owed or invested over a year, due to interest.

Amortize

The process of gradually paying off a debt or spreading the cost of an intangible asset over its useful life for accounting and tax purposes.

Equal End-of-Year

A term referring to payments or allocations that are made uniformly at the end of each year.

Effective Annual Rate

The effective annual rate (EAR) is the interest rate on a financial product restated from nominal terms into an annualized rate accounting for compounding over a period.