what is Bretton wood agreement.

Question

Answer

《》The Bretton Woods agreement  of monetary management established the rules for commercial and financial relations among the United States, Canada, Western European countries, Australia, and Japan after the 1944 Bretton Woods Agreement......

Answer

The ' Bretton Woods' Agreement took place in July 1944 at Bretton Woods in New Hampshire, USA.  To preserve the global economic stability and full employment in the industrial world, ' International Monetory Fund' and the World Bank were established. They mainly dealt with the debits of member nations and external surplus, and also financed the post-war reconstructions.

Answer

1. Economists and politicians drew some lessons from depression of 1929 and inter war period .I. e. economic stability could be ensured only through government intervention.

2. IBRD (World Bank)was created to provide needed capital for development.

3. The system continued for some years but collapsed in 1971.........

Answer

The Bretton Woods Agreement, also known as the Bretton Woods System, was a landmark international monetary system established in July 1944. It was named after the town of Bretton Woods in New Hampshire, USA, where representatives from 44 countries gathered to create a framework for post-World War II economic stability and growth.

Key Objectives:
The Bretton Woods Agreement aimed to achieve the following objectives:

1. Stabilize Exchange Rates: The agreement sought to establish a stable exchange rate system to prevent competitive devaluations and currency wars, which were prevalent during the Great Depression.

2. Promote International Trade: By stabilizing exchange rates, the agreement aimed to facilitate international trade by providing predictability and minimizing uncertainties related to currency fluctuations.

3. Rebuild Post-War Economies: The agreement aimed to provide a stable monetary framework to aid in the reconstruction of war-ravaged economies and promote global economic development.

4. Establish International Monetary Cooperation: The Bretton Woods Agreement aimed to foster cooperation and coordination among countries to address economic imbalances and promote financial stability.

Main Components of the Agreement:
The Bretton Woods Agreement consisted of several key components:

1. Fixed Exchange Rates: Countries agreed to fix their exchange rates to the U.S. dollar, with the dollar itself pegged to gold. This created a system of fixed exchange rates, where currencies had a limited range of fluctuation.

2. International Monetary Fund (IMF): The agreement established the IMF as an international organization responsible for overseeing the global monetary system. Its primary role was to ensure exchange rate stability, provide financial assistance to member countries facing balance-of-payment difficulties, and promote international monetary cooperation.

3. International Bank for Reconstruction and Development (IBRD): The IBRD, now part of the World Bank Group, was created to provide financial support for the reconstruction and development of war-torn economies.

Impact and Legacy:
The Bretton Woods Agreement played a significant role in shaping the global economy for several decades:

1. Post-War Stability: The agreement helped stabilize currencies and promote economic growth in the aftermath of World War II, contributing to the post-war economic boom.

2. Emergence of the U.S. Dollar as a Reserve Currency: The U.S. dollar became the dominant international reserve currency, as most countries held their reserves in dollars due to its convertibility to gold.

3. Demise of the Agreement: The Bretton Woods System eventually collapsed in the early 1970s due to various factors, including the U.S. dollar's overvaluation, persistent trade imbalances, and the inability to maintain the fixed exchange rate system.

4. Shift to Floating Exchange Rates: Following the collapse of Bretton Woods, most countries adopted floating exchange rates, allowing their currencies to fluctuate freely based on market forces.

In conclusion, the Bretton Woods Agreement was a landmark international monetary system that aimed to stabilize exchange rates, promote international trade, and rebuild post-war economies. Its key components included fixed exchange rates, the establishment of the IMF and IBRD, and the use of the U.S. dollar as a reserve currency. While the system eventually collapsed, it left a

Answer

The Bretton Woods system of monetary management established the rules for commercial and financial relations ( economical)among the United States, Canada, Western Europe, Australia and Japan in the mid-20th century.

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