Supporters of the Bretton Woods System Believed That Inflation and Unemployment

question 15

Multiple Choice

Supporters of the Bretton Woods system believed that inflation and unemployment would, under some circumstances, __________

• A)be nonexistent.
• B)be self-correcting.
• C)equal equilibrium rates.
• D)below equilibrium rates.

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Definitions:

Free Floating Exchange Rate System

A currency system where the value of a country's currency is determined by the supply and demand for the currency in the foreign exchange market, without direct government control.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to more money flowing out of the country than coming in.

Billion

A numerical value equal to 1,000 million in the short scale and 1,000,000 million in the long scale.

Depreciates In Value

The process by which an asset loses value over time.