Which of the Following Observations Is True of the Bretton

question 63

Multiple Choice

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

• A)All countries participating were required to exchange their currencies for gold.
• B)Devaluation was accepted as a tool of competitive trade policy.
• C)All participating countries agreed to try to maintain the value of their currencies within 10 percent of the par value by buying or selling currencies as needed.
• D)Devaluation of up to 10 percent would be allowed without any formal approval by the IMF.

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Definitions:

Government Revenues

The total money received by the government from various sources, including taxes, fees, and other charges.

Lump-Sum Tax

A tax that is a fixed amount, not dependent on the taxpayer's income level or economic transactions.

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is achievable but is not achieved.

Vertical Equity

The principle that taxpayers with higher incomes should pay more in taxes than those with lower incomes.