If the US Were to Revert to a Gold Standard, Trade Deficits

question 68

Multiple Choice

If the U.S. were to revert to a gold standard, trade deficits would:

• A) result in gold reserves in the U.S. increasing.
• B) result in higher domestic interest rates.
• C) quickly disappear.
• D) result in high inflation.

---

Definitions:

Income Statement

A financial statement that reports a company's revenues, expenses, and net income or loss over a specific period.

Premium on Bonds Payable

An amount by which a bond's selling price exceeds its face value, indicating that the bond was issued at a price higher than its nominal value.

Straight-Line Method

A method of calculating depreciation of an asset, where the cost of the asset is evenly divided over its useful life.

Bond Premium

The surplus of a bond's market price over its nominal or face value.