The Speculative Attack on the British Pound in 1967 Succeeded

question 69

Multiple Choice

The speculative attack on the British pound in 1967 succeeded because

• A)the pound was seriously undervalued relative to the dollar.
• B)Britain decided to drop out of the Bretton Woods system.
• C)British exports greatly exceeded British imports, causing a large inflow of gold.
• D)the Bank of England lacked the international reserves to defend the existing exchange rate indefinitely.

---

Definitions:

Lockbox Fee

A charge by banks for the service of collecting payments through a secured post office box and processing them for the account holder.

Money Market Securities

Short-term financial instruments, typically with high liquidity and very low risk, used by individuals and corporations to manage cash.

Average Daily Cost

The average cost incurred by a business or an individual on a daily basis.

Lockbox System

A service provided by banks to process payments by diverting them directly to a special post office box, speeding up the collection process.