iBT_Q4_03

Directions: In this question, you will read a short passage and then listen to a talk on the same

academic topic. You will then answer a question about them. After you hear the question, you will have 30 seconds to prepare your response and 60 seconds to speak. You have 45 seconds to read the passage. 

 

 

                                        A Meeting at Bretton Woods 

 

               The Bretton Woods Conference was held in New Hampshire in July 1944, and was attended by forty-four nations.  The conference was held to make  plans for post–World War II international economic cooperation. The

purpose of this meeting of nations was to make financial arrangements for

the postwar era, and to provide post war economic assistance to governments in need. The delegates reached agreement on an international monetary fund to promote exchange stability and expansion of international trade and the formation of what is today, the World Bank. The original agreement became law in the United States in 1945 and lasted unchanged until 1971.

 

Narrator:  Now listen to part of a talk in an economics class.

Professor: The year was 1944. For the first time in modern history, an international agreement was reached to govern monetary policy among nations. It was a chance to create a stabilizing international currency and ensure monetary stability once and for all. Forty-four nations met for three weeks in July 1944, at a hotel resort in Bretton Woods, New Hampshire. After the war, many countries were war-ravaged. This international meeting hoped to stabilize currency and provide reconstruction loans to those nations. It was a turning pointin monetary history. What makesthe Bretton Woods accords so interesting to us today is the fact that the whole plan for international monetary policy was based on nations agreeing to adhere to a global gold standard. Each country signing the agreement promised to maintain its currency at values within a narrow margin to the value of gold. The system worked for 25 years. Many economists say that from the very beginning, gold was the vulne

rable point of the Bretton Woods system. The value of an ounce of gold at the time of the meeting was $35 per ounce. By 1968, it had become clear that maintaining the gold standard under the Bretton Woods configuration was no longer practical, and the Bretton Woods agreement was no longer workable. The members of the group in 1944 could not foresee the birth of the Euro.

Therefore, the agreement no longer functioned as an effective centralized monetary body. But we must realize how important this meeting was in shaping the world economy post World War II. 

Narrator:  Now get ready to answer the question. 

 

Narrator:  The professor talked about the end of the Bretton Woods system. Explain what the purpose of the Bretton Woods system was and how and why it ended. Give details and examples to support your answer.