Question

Under a gold standard, A. countries should keep the supply of their domestic money constant. B....

Under a gold standard,
A. countries should keep the supply of their domestic money constant.

B. the production of gold greatly influences countries’ monetary policy.

C. countries should keep the supply of foreign exchange less than their domestic money supply.

D. countries should restrict the demand for foreign goods. E. most countries’ currencies were convertible directly into gold at fixed rates, but exchange rates between currencies were not fixed.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The correct option is: E. most countries’ currencies were convertible directly into gold at fixed rates, but exchange rates between currencies were not fixed.

The gold standard is a monetary system where a country's currency or paper money has 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 uses the gold standard sets a fixed price for gold and buys and sells gold at that price. That fixed price is used to determine the value of the currency.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
•Temporary changes in fiscal policy are more effective in influencing output and employment in the short...
•Temporary changes in fiscal policy are more effective in influencing output and employment in the short run: –The rise in aggregate demand and output due to expansionary fiscal policy raises demand for real monetary assets, putting upward pressure on interest rates and on the value of the domestic currency –To prevent an appreciation of the domestic currency, the central bank must buy foreign assets, thereby increasing the money supply and decreasing interest rates –In effect, under fixed exchange rates an...
30 of 50 A decrease in the reserve ratio will cause the money supply to decrease....
30 of 50 A decrease in the reserve ratio will cause the money supply to decrease. cause the money supply to increase. not affect the money supply. decrease the money multiplier. Question 31 of 50 The term "depository institution" refers to commercial banks only. credit unions only. savings and loan associations only. commercial banks, credit unions, and savings and loan associations. Question 32 of 50 Goldsmiths were able to practice an early form of fractional reserve banking because they knew...
37. A(n) _____ in the money supply in a country _____ the domestic interest rates. a....
37. A(n) _____ in the money supply in a country _____ the domestic interest rates. a. expansion; increases b. expansion; decreases c. contraction; decreases d. contraction; has no impact on 38. A(n) _____ in a country’s money supply causes international capital _____. a. expansion; outflows b. expansion; inflows c. contraction; outflows d. contraction; stock to stabilize 39. Following an expansion of the money supply, a government committed to maintaining a fixed exchange rate must: a. accept a surplus in its...
Question: A significant increase in inflation in a country causes, a. investors to sell domestic assets...
Question: A significant increase in inflation in a country causes, a. investors to sell domestic assets b. foreign exchange market pressure to depreciate the domestic currency c. currency traders to sell the domestic currency d. all of the above Question 2 Capital flight from a domestic country tends to cause, a. selling of the domestic country's currency b. weakening of the domestic country's currency c. greater difficulty of domestic borrowers in repaying debt denominated in a foreign currency d. all...
8) If the deficit is financed by selling bonds to the ________, the money supply will...
8) If the deficit is financed by selling bonds to the ________, the money supply will ________, increasing aggregate demand, and leading to a rise in the price level. A) public; rise B) public; fall C) central bank; rise D) central bank; fall 9) Keynes's theory of the demand for money implies that velocity is A) not constant but fluctuates with movements in interest rates. B) not constant but fluctuates with movements in the price level. C) not constant but...
True or false and explain please. 1.Like gold standard, the currency board (foreign exchange rate policy)...
True or false and explain please. 1.Like gold standard, the currency board (foreign exchange rate policy) is doomed to fail. 2.For euro to become a world currency, it is necessary that the eurozone countries run long-term trade deficits. 3.For a country with deficit in current account, devaluation of domestic currency will help reduce the deficit immediately. 4.In a nation which pegs its currency to the U.S. dollar at fixed exchange rates, it is very likely that the central bank must...
A country that has been operating under a fixed exchange-rate regime falls into recession. All attempts...
A country that has been operating under a fixed exchange-rate regime falls into recession. All attempts at using fiscal polecat to lift the economy out of recession have failed. 1. If the central bank was to use monetary policy to help lift the economy out of the recession, it would want to (change, decrease or increase) the money supply and (changes decrease or increase) interest rates in the economy. 2. This change in interest rates would cause net capital outflow...
Q) Under the monetary approach to exchange rates, if real money demand is greater at home...
Q) Under the monetary approach to exchange rates, if real money demand is greater at home but relative money supply is greater in foreign markets, then the exchange rate should be: The answer is less than 1, but I think we cannot say anything about the value of the exchange rate itself. We can say the exchange rate will appreciate, so the rate of change can be less than 1. However, why can we conclude that the exchange rate itself...
1. In a fixed exchange rate regime how might an increase in the money supply effect...
1. In a fixed exchange rate regime how might an increase in the money supply effect the economy? expansionary monetary policy has no effect on the economy other than depleting reserves the LM curve would shift right permanently decreasing interest rates and stimulating higher economic activity the IS curve shifts right creating jobs and economic growth the BP curve shifts up causing crisis in financial markets 2. Which of the following policy combinations represents countries in the European Union? little...
1.The Fed prefers to focus on the interest rate rather than growth in the money supply...
1.The Fed prefers to focus on the interest rate rather than growth in the money supply because a.it does not like to conduct open market operations. b.the money supply is too unpredictable. c.it makes inflation more predictable. d.money demand is too volatile. e.it is easier to fix the interest rate than maintain growth in the money supply. 2. Assume the Fed has complete control over the money supply. If the demand for money were greater than the supply of money,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT