One Potential Drawback of the Gold Standard Is That

question 47

Multiple Choice

One potential drawback of the gold standard is that

• A)the world economy can be subject to deflationary pressure due to the limited supply of monetary gold.
• B)the world economy can be subject to inflationary pressure without changes in the supply of monetary gold.
• C)gold is scarce.
• D)all of the above

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Definitions:

Domestic Price

The price of goods and services within a specific country, determined by local supply and demand conditions.

Export Supply Curve

A graphical representation showing how the quantity of goods a country exports changes in response to changes in the price of those goods.

Domestic Opportunity Cost

The cost of forgoing the best alternative use of resources within a country.

Producing

The act of creating goods or services through the combination of labor, materials, and technology.