Assertion (A): There was a collapse of the system of fixed exchange rates and the introduction of a system of floating exchange rates.

Reason (R): From the 1960s, the rising costs of its overseas involvements weakened the US's finances and competitive strength. It could not command confidence as the world's principal currency.

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Both (A) and (R) are true and (R) is the correct explanation of (A).

Both (A) and (R) are true but (R) is not the correct explanation of (A).

(A) is true but (R) is false.

(A) is false but (R) is true.

answer is A.

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Detailed Solution

Both (A) and (R) are true, and (R) is the correct explanation of (A).
A proper conversion scale is a point at which a country's cash does not change as per the forex market. Instead, the nation ensures that its worth against the dollar, or other significant monetary forms, continues as before. So it trades enormous amounts of its cash and the additional money to keep up with that decent worth. Also, drifting or adaptable conversion is not set in stone by the market influences of interest and supply. Under the discursive conversion scale system, the market influences decide the worth of the homegrown cash in light of the powers of good and collection of the homegrown money. There was a breakdown of the arrangement of fixed trade rates which prompted the reception of the presentation of a procedure for drifting trade rates.

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