Question

3. What is the Bretton Woods System? When and how did the system collapse?

4. What was the role of the U.S. dollar in the gold standard exchange and the Bretton Woods System?

Answer 1

3.Bretton Woods System was where 44 countries pegged their currency against the US dollar assuming that dollar is a very stable currency. US dollar was pegged to gold. In this system US dollars could be easily converted to gold.The system collapsed in 1973 because of the instability of dollar and the amount of gold supply could no cover for the dollar circulation.The then president Richard Nixon stopped he convertability of gold into dollar.

4. Dollar being a stronger currency as compared to other weaker currencies was Here the paper dollar currency was chosen as benchmark for pegging other foreign currencies.
In Gold standard paper dollars could be easily converted to gold and vice versa.