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.

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Definitions:

Decision

A decision refers to the choice made between two or more alternatives, after considering the consequences and benefits of each.

Simulation Heuristic

A cognitive process where individuals predict the frequency of an event based on how easily they can imagine it happening.

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Pre-arranged travel plans that combine elements such as accommodations, transportation, and activities, typically offered at a bundled price.