Finance Brain
Courses
Home
Sign in
← The Path to 1971
1 / 4
Question
What was the "Triffin Dilemma," and why did it create a structural problem for the Bretton Woods system?
1
Triffin argued that any reserve currency would eventually be counterfeited by foreign governments
2
Supplying enough dollars for international trade required US trade deficits, but those deficits created foreign dollar claims that exceeded US gold reserves
3
The dilemma was that the US had to choose between maintaining gold reserves and maintaining dollar convertibility, since both were impossible simultaneously
4
The dilemma was that fixed exchange rates required all countries to maintain identical inflation rates, which was politically impossible
Press 1–4 to pick an answer
Finance Brain