Under the Gold Standard,a Country with a Negative Balance of Trade

question 213

Multiple Choice

Under the gold standard,a country with a negative balance of trade would experience

• A)an inflow of gold and higher prices.
• B)an inflow of gold and lower prices.
• C)an outflow of gold and higher prices.
• D)an outflow of gold and lower prices.

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Definitions:

Commodity Bundle

A specific collection of goods or services that is considered as a single unit for analytical purposes in microeconomics.

Convex Preferences

A characteristic of consumers' preferences indicating that they prefer mixes or combinations of goods over extreme amounts of either one, depicted by a convex shape in utility analysis.

Indifferent

Having no particular interest or sympathy; being unconcerned or neutral towards a specific outcome or item.

Transitive Preferences

A principle in which if an individual prefers option A over B, and B over C, then they also prefer A over C.