Under the Bretton Woods System, If a Country Developed a Permanent

question 49

Multiple Choice

Under the Bretton Woods system, if a country developed a permanent deficit in its balance of trade that could not be corrected by domestic policy, the IMF would agree to a

• A)currency devaluation.
• B)increase in employment.
• C)increase in output.
• D)increase in interest rates.
• E)increased tariffs

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Definitions:

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services and goods.

External Costs

Costs that fall on third parties who are not directly involved in a transaction or economic activity.

Marginal Social Costs

The total cost to society of producing one extra unit of a good or service, including both private costs and any externalities.

Property Rights

Legal rights to use, derive benefit from, and transfer property.