If Currencies Around the World Are Based on the Gold

question 44

Multiple Choice

If currencies around the world are based on the gold standard, and Japan raises the amount of gold for which the yen will trade, then holding all else constant,

• A)the yen will depreciate against the dollar.
• B)the yen will appreciate against the dollar.
• C)the value of the yen relative to the dollar will stay constant.
• D)the value of U.S.exports to Japan in terms of the yen will increase.
• E)the yen will depreciate against currencies not using the gold standard.

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Definitions:

Clientele Effect

A phenomenon where the types of investors attracted to a company's stock are affected by the company's dividend policy or other financial strategies.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns, encompassing various types such as retail and institutional investors.

Retained Earnings

The portion of a company's profit kept in the business after dividends are paid, used for reinvestment or paying down debt.

New Equity

The issuance of additional shares of stock by a company to investors, typically to raise capital for business expansion or operational needs.