Question

Bretton Wood System;

Sadly, I don't have the etext due to financial issue so I hope someone can help me make some intellectual guess about the Bretton Woods system/ IMF/ World Bank/ Gold Standard policies.

Based on information in the etext, "currency controls or restrictions were allowed for transactions recorded on the financial accounts." O True False

Answer 1

a) True, this was part of the capital control under the balance of payment as per the IMF rules. a nation can allow partial or full capital exit or entry in the nation, for example, India has allowed partial capital control and FDI only in certain areas. Whereas the east asian tiger nations allowed full capital convertibility.

b) True, current account was to be completely convertible under the IMF system .

c) False, no such pegging is done but the nations are allowed to let their currency freely float.

d) True, the larger the quota the more the voting power the nations have. US have highest around 17%.