Under the Gold Standard, When a Nation Had a Deficit

question 2

Multiple Choice

Under the gold standard, when a nation had a deficit in its balance of payments

• A) interest rates would rise which would reduce foreign investment.
• B) interest rates would fall which would increase foreign investment.
• C) gold would flow to foreign residents and the domestic money supply would decrease.
• D) gold would flow into the country leading to an increase in the domestic money supply.

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Definitions:

Cause-Effect

A relationship where one event (the cause) leads to the outcome of another event (the effect).

Interpretation

The action of explaining the meaning of something, or a way of understanding information within a specific context.

Income Records

Documentation that details the earnings or revenue received by an individual or organization over a certain period.

Human Errors

Mistakes made by people, often categorized as a factor affecting performance and outcomes in various fields.