Which of the Following Best Describes Circumstances Surrounding the Breakdown

question 189

Multiple Choice

Which of the following best describes circumstances surrounding the breakdown of the Bretton Woods system?

• A)The United States was enjoying a persistent trade surplus.
• B)There was too much dependence on the dollar because no other country had a stable currency.
• C)Germany, with its strong currency, refused to defend the dollar.
• D)Speculators were betting on the fall of the dollar.
• E)All the other nations basically wished their currencies to appreciate, which was impossible under the system.

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Definitions:

Unsystematic Risk

The type of risk that is unique to a specific company or industry, unpredictable and can be mitigated through diversification.

Minable Gold Reserves

The quantity of gold that is economically viable to extract from the earth's crust.

Risk Factor

An element or variable that increases the likelihood of a negative outcome, such as financial loss or failure.

Unsystematic Risk

The risk tied to a specific company or industry that can be minimized through diversification, unlike market-wide systemic risk.