Under Which of the Following Systems Will an Imbalance in Trade

question 20

Multiple Choice

Under which of the following systems will an imbalance in trade be most likely to cause changes in a country's money supply and price levels,leading to a restoration of trade equilibrium?

• A) the gold standard
• B) the multinational exchange standard
• C) the stable exchange standard
• D) flexible exchange rates
• E) equation of exchange rates

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Definitions:

Language Acquisition Device

A hypothetical mechanism proposed by Noam Chomsky that suggests humans are born with an innate ability to understand the principles of language.

Nativist Theory

A theory in psychology that suggests that certain skills or abilities are "native" or hard-wired into the brain at birth.

Syntax

The set of rules and principles that dictate the structure of sentences in a language, including word order and sentence formation.

Semantics

The study of meaning in language, including the analysis of the meanings of words, phrases, and sentences.