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:

Horizontal Axis

In a graph or chart, the x-axis, representing the independent variable or baseline measurement criteria.

Budget Line

A representation of all the combinations of goods and services a consumer may purchase given current prices within their income level.

Price Of Potatoes

The cost per unit at which potatoes are sold or bought in the market, affected by factors like supply, demand, and production costs.

Horizontal Axis

The x-axis in a graph or chart, typically used to represent the independent variable or to plot time or specific categories.