The Bretton Woods Agreement has been a subject of discussion for quite some time. It was a significant agreement that brought about stability in the post-World War II world economy. If you have been searching for information on the Bretton Woods Agreement, you might have come across some confusing statements. In this article, we will explore the question „which of the following statements is true of the Bretton Woods Agreement quizlet?“
To answer this question, we need to first understand what the Bretton Woods Agreement was. The Bretton Woods Agreement was signed in 1944 to establish a new international monetary system. The primary focus of the agreement was to create exchange rate stability between currencies. To achieve this, the signatories agreed to peg their currencies to the US dollar, which was backed by gold at a fixed rate. Every other currency was then pegged to the US dollar at a fixed exchange rate.
Now, let`s examine the quizlet statement options.
Statement 1: The Bretton Woods Agreement created a new international monetary system.
This statement is true. The Bretton Woods Agreement was established to create a new international monetary system after World War II.
Statement 2: The Bretton Woods Agreement allowed countries to devalue their currency to increase exports.
This statement is also true. The Bretton Woods Agreement allowed countries to adjust their exchange rates within a specific range to boost their exports. However, it was only within a certain range that was agreed upon by all signatories.
Statement 3: The Bretton Woods Agreement led to the formation of the World Trade Organization.
This statement is false. The Bretton Woods Agreement did not lead to the formation of the World Trade Organization (WTO). The WTO was formed in 1995 as a successor to the General Agreement on Tariffs and Trade (GATT), which was established in 1947.
Statement 4: The Bretton Woods Agreement established a fixed exchange rate system based on the British pound.
This statement is false. The Bretton Woods Agreement established a fixed exchange rate system based on the US dollar, which was backed by gold at a fixed rate.
In conclusion, the answer to the question „which of the following statements is true of the Bretton Woods Agreement quizlet?“ is statement 1 and statement 2. The Bretton Woods Agreement created a new international monetary system, and it allowed countries to devalue their currency to boost their exports. Statement 3 and statement 4 are false.