Under the Bretton Woods System, Whenever a Country Ran a Short-Term

question 70

Multiple Choice

Under the Bretton Woods system, whenever a country ran a short-term balance of payments deficit, it was:

• A)obliged to contract its money supply.
• B)obliged to expand its money supply.
• C)likely to increase the value of its currency.
• D)possible for it to borrow from the IMF.

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Definitions:

Productive Efficiency

A situation in which an economy or production system cannot produce more of one good without reducing the output of another good, indicating optimal production resource usage.

Capital Goods

Assets owned by companies for an extended period, instrumental in manufacturing products and providing services, including items like equipment, machinery, and buildings.

Consumer Goods

Products intended for final use by consumers rather than further manufacturing or processing.

Future Growth Rate

An estimate of how fast an economy, company, or investment is expected to grow in the future.