Which of the Following Best Describes Circumstances Surrounding the Breakdown

question 58

Multiple Choice

Which of the following best describes circumstances surrounding the breakdown of the Bretton Woods system?

• A)The United States was enjoying a persistent trade surplus.
• B)There was too much dependence on the dollar because no other country had a stable currency.
• C)Germany,with its strong currency,refused to defend the dollar.
• D)Speculators were betting on the depreciation of the U.S.dollar and they started selling dollars in the foreign exchange market.
• E)The member countries began restricting free trade by introducing tariffs.

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Definitions:

Fiscal Policy

Governmental actions related to changes in taxation and spending levels intended to influence economic activity.

Business Cycle

The natural rise and fall of economic growth that occurs over time, consisting of periods of expansion, peak, contraction, and trough.

Fiscal Year

A government's or organization's financial year used for accounting purposes, which may not necessarily align with the calendar year.

Multiplier

In economics, a factor by which a change in spending will be magnified in the overall economy, affecting output and income levels.