In the late 19^th century, the gold standard system was first adopted by the economically-developed nations, under the leadership of the Great Britain, the hegemonic power at that time. The gold standard was a monetary system where a country’s currency or paper money had a value directly linked to gold. With the gold standard, countries agreed to convert paper money into a fixed amount of gold. A country that used the gold standard set a fixed price for gold and bought and sold gold at that price. That fixed price was used to determine the value of the national currency (Bryan, 2010). Until the First World War, most countries in Europe were on the gold standard. Yet with the war, the system collapsed, because of the declining power of Great Britain and of the terrible economic conditions during and after the war. Even though there were some efforts to return to the safety of the gold standard in the second part of the 1920s, this did not last long due to the stock market crash, or the Great Depression, in late 1929. Therefore, the interwar period was basically an era characterized by financial instability and low level of international trade, with no vivid economically hegemonic power. The Great Depression, the worst economic crisis in the history of the industrialized World, began after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Then the Second World War erupted in late 1939, lasting about six years. Towards the end of the war, a stable finance and monetary system was aimed to be established by the Western countries fighting against Nazi Germany under the leadership of the United States. To that end, delegates from 44 countries met in the United States, in Bretton Woods, New Hampshire in July 1944. The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was held from July 1-22, 1944. The main goals were to ensure a foreign exchange rate system, prevent competitive devaluation, encourage international trade, and eventually promote economic growth.

With the intention of realizing these goals, the Bretton Woods Agreement was signed on July 22, 1948, whereby the so-called Bretton Woods system came into being.

In 1958, the Bretton Woods system became fully functional, as national currencies became convertible. In order to convert currencies, countries settled their international balances in dollars, while United States dollars were fully convertible to gold. As also understood from the information given, the correct chronological order of the events in the options is “I, II, III, IV, V”, so the correct answer is A.