The Making of a Global World Test - 6

Bretton Woods Conference established the International Monetary Fund(IMF). This organization was established to deal with external surpluses and deficits of its members.

The International Bank for Reconstruction and Development was set up. This is popularly known as the World Bank

The International Bank for Reconstruction and Development was set up. This is popularly known as the World Bank.It was established to finance post-war reconstruction.

The IMF and World Bank are often referred to as Bretton Woods Institutions.

The Bretton Woods system was based on fixed exchange rates. In this system, national currencies, for example the Indian rupee, were pegged to the dollar at a fixed exchange rate. The dollar itself was anchored to gold at a fixed price of $35 per ounce of gold.

The Bretton Woods System started an era of unprecedented economic growth in the Western industrial nations and in Japan.

The IMF and the International Bank for Reconstruction and Development (World Bank) were designed to meet the financial needs of the industrial countries. They were not equipped to cope with the challenge of poverty and lack of development in the former colonies.

Trade Surplus: It is a situation under which value of exports is more than imports.

Coolie: Unskilled ‘native’ labourers. Indentured Indian labourers were often referred to as ‘coolies’ in Trinidad.

Flexible or Floating Exchange Rates: These rates fluctuate depending on demand and supply of currencies in foreign exchange markets, in principle without interference by governments.