Under the Gold Standard

question 143

Multiple Choice

Under the gold standard,

• A)no nation had control of its domestic monetary policy, and therefore no nation could control its aggregate demand.
• B)the world's commerce was at the mercy of gold discoveries.
• C)discoveries of gold meant higher prices in the long run and higher real economic activity in the short run.
• D)All of the above are correct.

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Definitions:

Transfer Price

The price at which divisions of a company transact with each other, such as the exchange of supplies or labor between departments.

Market Price

The current price at which an asset or service can be bought or sold.

Variable Cost

Expenses that change in proportion to the production or sales figures, like labor and materials.

Operating Income

Operating income refers to an organization's earnings before interest and taxes (EBIT), derived from its primary business activities excluding any earnings from investments and other non-operational activities.