Briefly describe how the Bretton Woods system worked. What advantages did it have over the gold standard? What problems did the Bretton Woods system eventually encounter?
What will be an ideal response?
Under the Bretton Woods system, the United States agreed to convert dollars into gold at the official price of $35.00 per ounce. Foreign central banks agreed to buy and sell their own currencies at a fixed rate versus the dollar. The Bretton Woods system was intended to allow for smoother short-term economic adjustments than had been possible under the gold standard. One key problem with the Bretton Woods system was that changing the dollar's value required a coordinated realignment of all other currencies. This was difficult to achieve in practice.
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What is the per capita income of Genovia if its gross domestic product is $4,000,000 and total population is 20,000?
A) $120 B) $200 C) $400 D) $100
The liquidity premium theory holds that investors
A) always choose the bond with the highest expected return, regardless of maturity. B) require a term premium to compensate them for investing in a less preferred maturity. C) view bonds of different maturities as perfect substitutes. D) view bonds of different maturities as completely unsubstitutable.
Which type of unemployment is most likely to help an economy become more efficient?
a. Cyclical unemployment b. Voluntary unemployment c. Seasonal unemployment d. Frictional unemployment e. Underemployment
To counteract relative price changes, the government would implement:
A. monetary policy. B. policies that affect the supply and demand for all goods and services. C. polices that affect the supply and demand for a specific good. D. fiscal policy.