What is meant by the Bretton Woods Agreement?

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Source: Textbook

The Bretton Woods Agreement refers to the framework for the international monetary and financial order established at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire, USA, in July 1944. The agreement's primary goal was to ensure economic stability and full employment in the industrial world. It established a system of fixed exchange rates, where currencies were pegged to the US dollar, which was in turn convertible to gold at a fixed price. It also led to the creation of two key institutions: the International Monetary Fund (IMF) to deal with trade imbalances and the World Bank (then the IBRD) to finance post-war reconstruction.

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