The Goldsmith's Ability to Create Money Was Based on the Fact

question 77

Multiple Choice

The goldsmith's ability to create money was based on the fact that:

• A)withdrawals of gold tended to exceed deposits of gold in any given time period.
• B)consumers and merchants preferred to use gold for transactions, rather than paper money.
• C)the goldsmith was required to keep 100 percent gold reserves.
• D)paper money was rarely redeemed for gold.