The collapse of the fixed exchange rate system has been traced to the
A) U.S. macroeconomic policy package of 1965-1968.
B) establishment of the gold standard.
C) Marshall Plan, under which the United States lent money to European nations.
D) failure of the International Monetary Fund to impose monetary discipline.
E) increased U.S. tax rate financing Great Depression-era programs.

Question

Quizplus · Accepted Answer

The collapse of the fixed exchange rate system has been traced to the U.S. macroeconomic policy package of 1965-1968, which included expansionary fiscal and monetary policies that led to inflation and a balance of payments deficit.

The Collapse of the Fixed Exchange Rate System Has Been