Under the Gold Standard, the Government Must Have Enough Gold

question 61

Multiple Choice

Under the gold standard, the government must have enough gold to back up any

• A)increase in money demand.
• B)increase in the money supply.
• C)change in its currency's exchange rate.
• D)foreign currency deposits in its central bank.
• E)additional government spending.

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Definitions:

Corporations' Profits

The financial earnings that remain for a corporation after all expenses, taxes, and costs have been deducted from total revenue.

Taxes

Mandatory financial charges or levies imposed by a government on its citizens and businesses as a source of revenue for the government, used to fund public services and goods.

Labor

Human effort, including both physical and mental effort, used in the production of goods and services.

Deadweight Loss

The decrease in economic productivity that happens when a free market does not reach an equilibrium state for a particular good or service.