Final answer:
The correct answer is B. Countries experiencing current account surpluses under the Bretton Woods system accumulated gold reserves, which were used to back the value of their currencies.
Step-by-step explanation:
Under the Bretton Woods system, countries that experienced current account surpluses were able to accumulate gold reserves. This system, established post-World War II, required countries to maintain fixed exchange rates between their currencies and gold. Consequently, a current account surplus, indicating that a country was exporting more than it was importing, allowed that country to increase its gold holdings. These gold reserves backed the value of the country's currency.
When the U.S. faced a dilemma with its gold reserves being less than the holdings of U.S. dollars by foreign central banks, President Nixon allowed the dollar to float freely, leading to its devaluation to correct the trade imbalance. This also marked the beginning of the end of the Bretton Woods era. Discrepancies between a country’s limited gold reserves and its currency held by foreigners could lead to a currency crises, revealing the underlying weakness of the fixed exchange rate system.