What is explained with a Smithsonian agreement?
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brittani
Apprentice
Joined: 05 Feb 2008
Posts: 1
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 Posted: 08/09/08 - 07:48 Post subject: |
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| Good afternoon everyone. My name is Katie and I would appreciate if you could tell me something about a Smithsonian agreement. I heard that it made quite a difference in the world economy. Can you tell me what is explained with Smithsonian agreement? Thank you in advance for the posts. |
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rhys
Apprentice
Joined: 15 May 2006
Posts: 2
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| Posted: 09/07/08 - 22:44 Post subject: |
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| Hello there Katie. Well, here’s the thing. Smithsonian agreement was an agreement reached back in 1971 between ten most developed countries in the world. It was about ending the gold standard. Before that, world economy was regulated by Bretton Woods Agreement. According to that agreement, all the money in circulation had to be covered by gold reserves. However, because of the inflation and big expenses in USA and other countries, it had to be abandoned. So, Smithsonian agreement explains exchange rates. From that day on, exchange rates are not fixed. According to that agreement, US dollar depreciated in relation to other currencies. Basically, that would be all. I hope that you’ll be satisfied with my post. Bye! |
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