Create a custom practice set
Pick category, difficulty, number of questions, and time limit. Start instantly with your own quiz.
Generate QuizThe ___ Dilemma describes the inherent paradox where a country issuing the global reserve currency (like the US Dollar) must run persistent current account deficits to supply the world with liquidity, which eventually undermines confidence in that very currency.
- Triffin
- seigniorage
- Total variable cost
- stagflation
Answer: Triffin
Proposed by economist Robert Triffin in the 1960s, this dilemma highlighted the fatal flaw in the Bretton Woods system. To facilitate global trade, the US had to pump dollars into the global economy via deficits, but doing so meant US gold reserves could no longer fully back the outstanding dollars, ultimately leading to the collapse of the gold standard in 1971.