Asked by
Michael Fernández
on Nov 26, 2024Verified
Under an international gold standard,
A) exchange rates would fluctuate inversely with the domestic interest rates of the participating countries.
B) each nation must agree to depreciate its currency in direct proportion to the growth of its real GDP.
C) gold would flow into a nation experiencing a balance of payments surplus.
D) exchange rates would fluctuate directly with the domestic price levels of the various trading countries.
International Gold Standard
The International Gold Standard was a monetary system in which the value of a country's currency was directly linked to a specific amount of gold, facilitating international trade and investment stability.
Balance of Payments
A summary of all transactions between residents of a country and the rest of the world over a specific period, including trade, investment, and financial transfers.
Exchange Rates
The value of one currency expressed in terms of another currency, determining how much foreign currency can be exchanged for a unit of domestic currency.
- Understand the principles of the gold standard, including its impact on international monetary policy and balance of payments adjustments.
Verified Answer
JV
Learning Objectives
- Understand the principles of the gold standard, including its impact on international monetary policy and balance of payments adjustments.