Which Of The Following Is Not True Regarding The Bretton Woods Agreement

Geschrieben am Freitag, April 16, 2021 | Kommentare: 0

In March 2010, Greek Prime Minister Papandreou wrote in a statement in the International Herald Tribune: „Democratic governments around the world must create a new global financial architecture, as bold as Bretton Woods, as bold as the creation of the European Community and the European Monetary Union. And we need that quickly. In interviews that coincide with his meeting with President Obama, he suggested that at the upcoming G20 meetings in June and November 2010, Obama would raise the issue of new regulations in international financial markets. In order to ensure economic stability and political peace, states have agreed to cooperate to accurately regulate the production of their currencies, maintain fixed exchange rates between countries and facilitate international trade more easily. This was the basis of the post-war American vision of global free trade, which included reducing tariffs and, among other things, maintaining a trade balance on fixed exchange rates, which would be favourable to the capitalist system. The Bretton Woods rules, set out in the articles of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), provide for a fixed exchange rate system. The rules also aimed to promote an open system by requiring members to convert their respective currencies into other currencies and to make free trade. Which of the following is NOT true about the IMF and the Bretton Woods system? The strengthening of the relative decline in American power and The dissatisfaction of Europe and Japan with the system was the continued decline of the dollar, the basis that had supported the global trading system after 1945. The Vietnam War and the government`s refusal of U.S. President Lyndon B. Johnson to pay for it and its Grand Corporation programs through taxation resulted in an increase in outflows of dollars to pay for military spending and widespread inflation, resulting in a deterioration in the U.S.

trade balance. In the late 1960s, the dollar was overvalued with its current position, while the German mark and the yen were undervalued; And of course, the Germans and the Japanese did not want to revalue their exports and thus increase them, while the United States tried to preserve its international credibility by preventing devaluation. [41] Meanwhile, the pressure on government reserves has been exacerbated by new international foreign exchange markets, with their huge pools of speculative capital in search of quick profits. [40] All attempts to maintain the link failed in November 1968, and a new political agenda attempted to transform the Bretton Woods system into an enforcement mechanism that laid the golden link set either by Fiat`s policy or by a restriction on the honour of foreign accounts.

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