Suppose the World Was on the Gold Standard

question 136

Multiple Choice

Suppose the world was on the gold standard.If the U.S.ran persistent trade deficits,all of the following would occur except

• A)the U.S.money supply would decline.
• B)the U.S.would have a falling average price level.
• C)U.S.interest rates would most likely rise.
• D)gold would flow into the United States.
• E)the U.S.trade deficit would disappear.

---

Definitions:

Efficient Combination

The optimal mix of goods and services produced with given resources to achieve maximum value or output.

Total Quantity

The overall amount or volume of a product or resource available or produced.

Unit of Output

The measurement of what is produced or accomplished within a given timeframe or per cycle of operation, typically associated with productivity.

Entrepreneurial Ability

The human resource that combines the other economic resources of land, labor, and capital to produce new products or make innovations in the production of existing products; provided by entrepreneurs.