The Gold Standard Eliminates the Possibility of a Balance of Payments

question 48

Multiple Choice

The gold standard eliminates the possibility of a balance of payments disequilibrium by:

• A) Changing the peg value of the currency to an ounce of gold.
• B) Inflating prices in countries with net inflows of gold and deflating prices in countries with net outflows.
• C) Shifting trade to the British pound.
• D) Encouraging the discovery of gold deposits.