The Breakdown of the Bretton Woods System Occurred Because

question 151

Multiple Choice

The breakdown of the Bretton Woods system occurred because

• A)the world economy was basically unhealthy
• B)the collapse of world gold production undermined the operation of the system
• C)the gold value of the dollar exceeded the exchange value, causing an outflow of the gold
• D)the dollar was undervalued
• E)of the greed of the highly industrialized and wealthy countries of the world

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Definitions:

Forward Contract

A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date.

Monetary Liability

An obligation of a company or individual to pay a sum of money in the future, typically involving interest.

Hedge

A financial strategy implemented to reduce the risk of adverse price movements in an asset, typically through derivative contracts.

Premium

The amount paid for a product or service beyond its basic cost, often relating to insurance policies, bonds, or options contracts.