Answer :
Explanation:
The Bretton Woods System (BWS) and the Gold Standard had a significant impact on the delegates from 44 countries who gathered in New Hampshire to establish the USD as the global reserve currency. The BWS was created in 1944 to establish a stable international monetary system after World War II.
One of the effective features of the BWS was the fixed exchange rate regime, where currencies were pegged to the USD, which in turn was pegged to gold. This provided stability and predictability in international trade and finance.
Additionally, the BWS established the International Monetary Fund (IMF) and the World Bank to promote economic cooperation and development. The IMF provided financial assistance to member countries facing balance of payment difficulties, while the World Bank focused on providing long-term loans for infrastructure projects.
The BWS also encouraged countries to promote free trade and avoid competitive currency devaluations. This helped to foster economic growth and stability among participating nations.
However, over time, the BWS faced challenges, such as the increasing US trade deficits and the inability to maintain the fixed exchange rate system. In 1971, the USD was no longer convertible to gold, leading to the collapse of the BWS.
Despite its eventual demise, the BWS had a lasting impact on the international financial system. It laid the foundation for future monetary arrangements and highlighted the importance of cooperation and stability in global finance.
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