The immediate cause for the collapse of the Bretton Woods System was:
A)the expectation that the United States would soon be forced to devalue the dollar
B)the massive flight of liquid capital from the United States
C)the attempt by three small European central banks to convert part of their dollar holdings into gold at the Fed
D)all of the above

Question

Quizplus · Accepted Answer

All three factors contributed to the collapse of the Bretton Woods System. The expectation of a potential devaluation of the dollar eroded confidence in the system, and the massive flight of liquid capital from the United States put pressure on the fixed exchange rate. Additionally, the attempt by three small European central banks to convert some of their dollar holdings into gold destabilized the system further.

The Immediate Cause for the Collapse of the Bretton Woods