One Problem Associated with the Gold Standard Was That

question 20

Multiple Choice

One problem associated with the gold standard was that

• A) nations gave up control of their money supply.
• B) there was an incentive for individuals to hold gold at all interest rates.
• C) there was no fluctuation in exchange rates.
• D) nations could not determine their current account balances.

---

Definitions:

Demand for Funds

The desire of businesses, governments, and individuals to borrow money to fund investment projects, operations, or consumption.

Interest Rate

The cost of borrowing money or the return on investment for lenders, typically expressed as a percentage.

Stock Price Index

An index that measures the performance of a basket of stocks, representing a specific sector, market, or economy.

Economic Indicators

Statistics and data points that are used to gauge the overall health and direction of an economy.