The Goldsmith's Ability to Create Money Was Based on the Fact

question 228

Multiple Choice

The goldsmith's ability to create money was based on the fact that

• A) withdrawals of gold tended to exceed deposits of gold in any given time period.
• B) consumers and merchants preferred to use gold for transactions, rather than paper money.
• C) the goldsmith was required to keep 100 percent gold reserves.
• D) paper money in the form of gold receipts was rarely redeemed for gold.