Question

According to the Bretton Woods system, which of the following statements is true? The exchange rate of the dollar was allowed to unilaterally change. Only the US dollar was convertible to gold. All currencies were required to be gold convertible. Gold was used as the common denominator for all currencies.

Answer 1

According to the Bretton Woods system, Only the US dollar was convertible to gold.

Explanation:

Bretton Woods has set up a dollar-based monetary system, identifying all dollar-related currencies, converted into gold, and, particularly, "as good as gold" for trade. Suddenly, American currency was essentially the world currency, the basis to which all other currencies were added.

Most nations adopted the price of gold until Bretton Woods5. This means that each nation should make sure that the currency is paid out for its gold worth. Each participant promised to exchange their currency for US dollars, not coins, after Bretton Woods.

Three quarters of the world gold was distributed in the United States. No other currency had gold sufficient to sustain it as a replacement. The dollar had an ounce of gold at 1/35 of a weight. The gradual change from gold standard to US dollar standard has been allowed for Bretton Woods.