4. Bretton Woods Suppose that after World War II, the United States and France agree to peg their currencies to each other under the Bretton Woods system at an exchange rate of $1.00 per franc. Suppose American demand for francs increases, and the equilibrium dollar price of a franc rises to $2.00 per franc. Which of the following actions could the U. S. government use under Bretton Woods to help eliminate the balance-of-payments imbalance at the pegged exchange rate? Exchange dollars for francs in order to buy gold from France Borrow French francs from the IMF and use the francs to buy dollars Decrease U. S. income taxes What was used to settle international debts and denominate international trade contracts under the Bretton Woods system? Gold The U. S. dollar IMF quotas True or False: With either dollarization or currency boards, interest rates must be different from the reserve currency country’s prevailing rates. True False