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-Refer to the above figure. A shortage will exist when
Gold Standard
A monetary system in which the standard economic unit of account is based on a fixed quantity of gold.
Fixed Rate
An interest rate that remains constant over the duration of a loan or investment, as opposed to a variable or floating rate.
Money Supply
The entire pool of financial assets existing in an economy at a specific timeframe.
Gold Standard
A monetary system where a country's currency or paper money has a value directly linked to gold.
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