Asked by Joshua Palesano on Jul 07, 2024
Verified
Under the gold standard,_____.
A) a nation's currency was traded for gold at a fixed rate
B) a nation's central bank or monetary authority had absolute control over its money supply
C) new discoveries of gold had no effect on money supply or prices
D) prices were constant globally
E) all international transactions were financed with gold
Gold Standard
A monetary system in which the standard economic unit of account is based on a fixed quantity of gold.
Fixed Rate
An interest rate that remains constant over the duration of a loan or investment, as opposed to a variable or floating rate.
Money Supply
The entire pool of financial assets existing in an economy at a specific timeframe.
- Acquire knowledge about the historical background and impact of the gold standard on international finance mechanisms.
Verified Answer
SS
Shamli SheemarJul 13, 2024
Final Answer :
A
Explanation :
Under the gold standard, a nation's currency was traded for gold at a fixed rate, meaning that the value of a country's currency was directly linked to the amount of gold held by the central bank. This limited the ability of central banks to control the money supply and the value of the currency.
Learning Objectives
- Acquire knowledge about the historical background and impact of the gold standard on international finance mechanisms.
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