Question

The U.S. dollar became the unofficial world vehicle currency after the First World War. At the end of the Second World War the Bretton Woods Agreement formalized the dollar as the world's vehicle currency. Please discuss 1.) the purpose of a vehicle currency for global use (100 words minimum) and 2.) how it impacts the U.S. (100 words minimum). Please include at least one external source to support your answer. Answers with less than the minimum word count and/or no external source will be downvoted.

Answer 1

Bretton Woods Agreement

Purchasing currency was one of the causes for the supply of the currency and how it has subsequently raised the price. Due to the currency's price, there have been unprecedented and relatively high issues, which have caused the central bank to even print more. It is important to understand how to increase the supply and subsequently also lower the currency's price. It is a type of monetary policy that is often applied by the central banks to combat inflation.

The purpose of a vehicle currency for global use

The purpose of the Bretton Woods helped in stabilizing and providing the global bodies such as “The International Monetary Fund (IMF)” and the “World Bank”. For global use, it has provided better-identified parameters and how it can be stabilized its flows effectively.

How it impacts the U.S

It has impacted the purpose of the Bretton Woods meeting as it has helped to install the new rules and the sets of regulations, and procedures which can help to churn out the economies. It has also helped in contributing to economic stability.