Which of the Following Observations Is True of the Bretton

question 105

Multiple Choice

Which of the following observations is true of the Bretton Woods agreement?

• A)The participating countries were required to exchange their currencies for gold.
• B)Devaluation was accepted as a tool of competitive trade policy.
• C)The agreement called for a system of floating exchange rates.
• D)For weak currencies,devaluation of up to 10 percent was allowed without any formal approval by the International Monetary Fund.
• E)A fixed exchange rate system was deemed impractical.

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Definitions:

Economic Theory

A set of principles and models that explains how economies operate and how economic agents interact.

Inelastic

A term describing a situation where the demand or supply for a good or service is relatively unresponsive to changes in price.

Elastic

Describes a situation in which the demand or supply of a product is sensitive to changes in price, meaning a small change in price leads to a large change in the quantity demanded or supplied.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good supplied.