Of the Following,which Is NOT True About the Bretton Woods

question 56

Multiple Choice

Of the following,which is NOT true about the Bretton Woods System?

• A) It was established in 1965.
• B) It established a global currency system based on a gold standard with the U.S.dollar pegged at a fixed rate of exchange to gold in an effort to control inflation.
• C) The IMF was established under the Bretton Woods Agreement.
• D) Eventually,major nations met to consider abandoning the Bretton Woods Agreement.
• E) Under the Smithsonian Agreement,the U.S.devalued the dollar against other countries' currencies.

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Definitions:

External Benefit

Positive effects of a transaction or activity on third parties not directly involved in the transaction, which are not reflected in the market price.

Negative Externality

A negative externality is a cost imposed on a third party not involved in the production or consumption of a good or service, such as pollution.

Positive Externality

A beneficial effect experienced by a third party who did not choose to incur that benefit, often resulting from an individual's or firm's actions.

Corrective Tax

A tax designed to internalize externalities, effectively correcting market outcomes that might otherwise result in social inefficiency.