Answer to Question #101293 in Macroeconomics for Nirmal kaur

Question

The bretton woods system was based on which standard

Answer 1

This system was essentially a system of the gold exchange standard, and more precisely, the gold dollar standard. The functions of world money were retained for gold, which played the role of a means of final settlement between countries and universal social wealth. But along with gold, the US dollar was used as international payment instruments and reserve (key) currencies, equated to gold as a standard for the value of other currencies, and partly the British pound.

The dollar was exchanged at the US Treasury at an official, fixed rate - $ 35 per troy ounce of gold (31.1 g). Both currencies could be exchanged in gold markets by central banks and government organizations. The dollar - the currency convertible into gold - has become the basis of currency parities, the dominant means of international payments, foreign exchange interventions and reserve assets. The national currency of the United States became simultaneously world money, this led to the emergence of the Dollar standard of the international monetary system based on the dominance of the dollar.