BANKING AFFAIRS

Detailed explanation-1: -A sizable increase in domestic spending on President Lyndon Johnson’s Great Society programs and a rise in military spending caused by the Vietnam War gradually worsened the overvaluation of the dollar. The system dissolved between 1968 and 1973.

Detailed explanation-2: -July 1944. A new international monetary system was forged by delegates from forty-four nations in Bretton Woods, New Hampshire, in July 1944. Delegates to the conference agreed to establish the International Monetary Fund and what became the World Bank Group.

Detailed explanation-3: -President Richard Nixon closed the gold window in 1971 in order to address the country’s inflation problem and to discourage foreign governments from redeeming more and more dollars for gold.

Detailed explanation-4: -The Bretton Woods Agreement and System created a collective international currency exchange regime that lasted from the mid-1940s to the early 1970s. The Bretton Woods System required a currency peg to the U.S. dollar which was in turn pegged to the price of gold.