The Gold Standard

question 66

Multiple Choice

The Gold Standard

• A) was a law that set the value of a currency in terms of a specified quantity of gold.
• B) was used by much of the world until the 1930s.
• C) was finally eliminated in the United States by Richard Nixon in 1971.
• D) is popular with some conservatives today.
• E) All of the above are true.

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Definitions:

Note

Unsecured debt, usually with a maturity under 10 years.

Protective Covenant

A clause in a financial contract that restricts certain actions of the borrower to protect the lender's interests.

Liquidity Premium

The additional return investors demand for holding a security that is not easily convertible into cash without loss of value.

CCC/CC/C Credit Ratings

Credit ratings given by rating agencies to denote high-risk bonds that are likely to default.