Question is multiple choice, I dont see how it would cause problems to the Brett

Question

Question is multiple choice, I dont see how it would cause problems to the Bretton Woods system...

Economists Michael Bordo of Rutgers University and Angela Redish of the University of British Columbia have argued that the "Bretton Woods" system functioned for a member of years but beggining in the late 1960's, in the face of inflationary US monetary policy it became a slow moving train wreck.

Inlfationary US monetary policy could cause problems for the Bretton Woods system because:

a.) The U.S. had significantly more gold than the increasing amount of currency being added to the economy

b.) The U.S. did not have sufficient gold to back up the increasing amount of currency being added to the economy.

c.) as US interests rates rose as a result of expansionary monetary policy, the price of gold fell.

d.) as US interests rates fell as a result of expansionary monetary policy, the price of gold rose.

Explanation / Answer

The US didnt have sufficient gold to back up the increasing amount of currency being added to the economy.

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