1. Under the gold standard, if Britain became more productive relative to the United States, what would happen to the money supply in the two countries? *
a.Cost of production in US rise, prices in US rise, DD for USD increase, USD appreciates.
b.Cost of production in UK fall, prices in UK fall, DD for £ increase, £ appreciates.
c.Cost of production in UK fall, prices in UK rise, DD for £ increase, £ depreciates.
d.Cost of production in UK fall, prices in UK fall, DD for £ increase, £ depreciates.
e. Option 4
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