Social Science (087) — AI-generated practice question

The Bretton Woods system linked national currencies to the US dollar, which was itself fixed to gold at $35 per ounce. From the 1960s, rising costs of US overseas involvements weakened its finances and competitive strength. The US dollar lost confidence as the world's principal currency and could no longer maintain its value in relation to gold.

Globally, as trade expanded rapidly, the dollar's fixed link to gold became increasingly difficult to sustain. This eventually forced the abandonment of fixed exchange rates and the adoption of a floating exchange rate system.

Source: Chapter 3, Section 4.4 — End of Bretton Woods and the Beginning of 'Globalisation'

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• The examiner expects two pressures: (1) internal US pressure — overseas spending weakening finances and dollar credibility; (2) the structural problem — dollar pegged to gold could not hold as the global economy grew.
• Mention both the dollar-gold link and the US fiscal/competitive weakness for full marks.
• Do not go into post-collapse consequences (debt crises, unemployment) — that is beyond what the question asks and wastes word count.
• The phrase "no longer commanded confidence" is directly from the textbook — safe to use.