If Currencies Around the World Are Based on the Gold

question 6

Multiple Choice

If currencies around the world are based on the gold standard and the European Union lowers the amount of gold for which the euro will trade, then holding all else constant,

• A)the euro will depreciate against the Canadian dollar.
• B)the euro will appreciate against the Canadian dollar.
• C)the value of the euro relative to the Canadian dollar will stay constant.
• D)the value of Canadian exports to EU countries in terms of the euro will decrease.
• E)the value of Canadian companies profits earned in Europe will rise.