Under the Bretton Woods System, a Country with a Balance

question 142

Multiple Choice

Under the Bretton Woods system, a country with a balance of payments deficit

• A)could get loans from the U.S.government.
• B)could devalue if deflationary policies failed to eliminate the deficit.
• C)was not allowed to devalue under any circumstance.
• D)was required to devalue its currency immediately.

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Definitions:

Elastic Market Demand

Describes a market situation where the quantity demanded of a good or service significantly responds to changes in its price.

Perfectly Elastic Demand

Perfectly elastic demand is a market scenario where the demand for a product can drastically change (increase or decrease) at the slightest change in price, essentially to infinity.

Patents

Legal documents granted by the government giving an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Innovation Incentives

Mechanisms or policies designed to encourage the development and implementation of new ideas, products, or methodologies.