Consider Two Countries, Mondrain and Davenport That Are on the Gold

question 21

Multiple Choice

Consider two countries, Mondrain and Davenport that are on the gold standard exchange rate system. Suppose the exchange rate between monds (Mondrain's currency) and divas (Davenport's currency) is 4 divas per mond and the price of gold in Mondrain is fixed at 60 monds per ounce of gold. What is the price of gold in Davenport?

• A) 6.66 divas per ounce of gold
• B) 15 divas per ounce of gold
• C) 24 divas per ounce of gold
• D) 240 divas per ounce of gold

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Definitions:

Income Distribution

The way in which a nation's total GDP is spread amongst its population.

Collective Bargaining Agreement

A written contract between an employer and a union representing the employees, outlining terms of employment, wages, hours, and working conditions.

Informal Agreement

An understanding or arrangement that is not formally documented but is recognized and respected by those involved.

Terms and Conditions

The set of rules and policies that govern employment contracts, including work hours, salaries, benefits, and job responsibilities.