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.

---

Definitions:

Percentage

A mathematical term representing a number or ratio expressed as a fraction of 100, used to define quantities relative to a whole.

United States

A country located in North America consisting of 50 states and a federal district, known for its diverse geography, culture, and significant influence in world affairs.

Wildfire

An uncontrolled fire spreading through vegetation in rural and wilderness areas, often exacerbated by dry conditions and strong winds.

Dehydrated

A condition resulting from excessive loss of body water and fluids.