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The Bretton Woods Agreement Created Which Two Multinational Institutions

In 1971, the United States suffered massive stagflation – a combination of inflation and recession that causes unemployment and low economic growth. In 1960, Robert Triffin, a Belgian-American economist, remarked that maintaining dollars was more valuable than gold because constant deficits in the U.S. balance of payments helped keep the system fluid and stimulate economic growth. What was to be known later as Triffin`s dilemma was predicted when Triffin discovered that if the U.S. stopped it to stem deficits, the system would lose its liquidity, it would not be able to keep up with global economic growth and thus shut down the system. deliberately encouraged the outflow of dollars and, beginning in 1950, the United States experienced a balance of payments deficit with the intention of providing liquidity to the international economy. The dollars have flowed through various U.S. aid programs: the Truman Doctrine, which contains aid to pro-AMERICANS. The Greek and Turkish regimes that were struggling to suppress the communist revolution helped different pro-American regimes. The Third World regime and, above all, the Marshall Plan.

From 1948 to 1954, the United States provided $17 billion in subsidies to 16 Western European countries. The IMF was designed to lend to countries with balance of payments deficits. Short-term balance of payments difficulties would be overcome by IMF loans, which would facilitate exchange rate stability. This flexibility meant that a Member State did not have to cause a depression to bring its national income down to such a low level that its imports would eventually fall within its limits.

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