What was a key flaw in the international currency and exchange rate management system that was exposed by the two World Wars?

Understand the Problem

The question is asking about a key flaw in the international currency and exchange rate management system that was revealed by the two World Wars. It aims to identify one significant issue among the options provided.

More Information

The excessive reliance on gold reserves was exposed as a flaw due to the rigid nature of the gold standard, which could not accommodate the financial demands and economic disruptions caused by the World Wars.

Tips

Avoid thinking that the dominance of a particular currency, like the US dollar, was an issue during the World Wars—this became more relevant post-WWII.

Sources

• Bretton Woods Agreement and the Institutions It Created Explained - investopedia.com