One reason for the collapse of the Bretton Woods system was
A) the U.S.balance of payments deficit
B) the U.S. balance of payments surplus
C) the depletion of reserve dollars by foreign central banks
D) none of the above

Question

One reason for the collapse of the Bretton Woods system was 
A) the U.S.balance of payments deficit
B) the U.S. balance of payments surplus
C) the depletion of reserve dollars by foreign central banks
D) none of the above

Quizplus · Accepted Answer

The U.S. balance of payments deficit was a major factor in the collapse of the Bretton Woods system. The U.S. had been running a deficit for several years, and foreign central banks began to exchange their dollars for gold, leading to a depletion of U.S. gold reserves. This made it difficult for the U.S. to maintain the fixed exchange rate system, ultimately leading to its collapse.

One Reason for the Collapse of the Bretton Woods System