Give any five factors responsible for the end of Bretton woods system and the beginning of globalisation
Answers
Answer:
(i) US dollar no longer commanded confidence.
(ii) US dollar could not maintain its value in relation to gold.
(iii) Collapse of fixed exchange rates on floating exchange rates.
(iv) International financial system changed, and developing countries were forced to borrow from Western Commercial Banks.
Answer:
The end of Bretton woods system happened when US declared that USD cannot be converted into gold, Under Bretten woods system currencies of all other nations were pegged to USD and there was fixed-exchange rate system in the world. The failure of the system can also be attributed to the great depression when financial disease of one country spread to whole world due to pegged up exchange rates. Then came the Keynesian revolution and emergence of Macroeconomics which not only pulled the world out of depression but gave various suggestions and policies to maintain better economic health in future.
Explanation: