In a counterpurchase, one part of the transaction can proceed ...

[D2AR0N]

In a counterpurchase, one part of the transaction can proceed even if the second part of the transaction requires additional time.
 
  Indicate whether the statement is true or false

Question 2

Why did the gold standard result in a fixed exchange rate system? How did the United States dollar become the currency standard under the Bretton Woods system?
 
  What will be an ideal response?

[kaylee05]

Answer to Question 1

TRUE

Answer to Question 2

The gold standard provided a stable, reliable international monetary system based on fixed exchange rates. When one country pledged to buy or sell an ounce of gold for x amount and another country agreed to buy or sell an ounce of gold for a par value of y amount, then the two currencies could be freely exchanged for the stated amount of gold, making x = 1 ounce of gold = y. All the Bretton Woods participants agreed to peg the value of their currencies to gold. However, only the United States pledged to redeem its currency for gold at the request of a foreign central bank. Thus, other countries accepted U.S. dollars to settle their transactions just as they had accepted British pounds in the nineteenth century.