Author Question: Refer to Figure 3-1. An increase in taste or preference would be represented by a movement from ... (Read 97 times)

stephzh · **on:** Jun 29, 2018

Refer to Figure 3-1. An increase in taste or preference would be represented by a movement from

A) A to B. B) B to A. C) D1 to D2. D) D2 to D1.

Question 2

Briefly describe how the Bretton Woods system operated.

What will be an ideal response?

ambernicolefink · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

Under the Bretton Woods System of fixed exchange rates, the United States pledged to buy or sell gold at a fixed price of 35 per ounce and the central banks of the member countries pledged to buy and sell their currencies at a fixed rate against the dollar. If a shortage or surplus of a country's currency occurred at the fixed exchange rate (also known as the par exchange rate), the central bank of the member country would buy or sell dollars with their currency to maintain the fixed exchange rate.