Question

Ferguson contends that breaking the link between _____________ and ____________ lead to __________ and credit bubbles.

	gold / money / inflation
	trust / credit / inflation
	silver / money / deflation
	gold / bond / crises
	finance / trust / stagflation

Answer 1

Ferguson contends that breaking the link between gold and money lead to inflation and credit bubbles.
- this is because gold standard puts limitation on the government and the banks to create inflation by excessive usage of money. Increase in the liquidity of money increases inflation in the economy as people hold more money with them and this rise in liquidity aslo gives rise to+ credit bubbles. Therefore, a link between gold and money is necessary to maintain the level of inflation in an economy.