If Currencies Around the World Are Based on the Gold

question 242

Multiple Choice

If currencies around the world are based on the gold standard,and the EU lowers the amount of gold for which the euro will trade,then holding all else constant,

• A)the euro will depreciate against the dollar.
• B)the euro will appreciate against the dollar.
• C)the value of the euro relative to the dollar will stay constant.
• D)the value of U.S.exports to EU countries in terms of the euro will decrease.

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Definitions:

Technological Change

The process of invention, innovation, and diffusion of technology or processes that may drive economic growth or affect productivity.

Technological Improvements

Enhancements or advancements in technology that increase productivity or efficiency in a process or product.

Unemployment

The state of being without a job despite actively looking for work, often used as a key economic indicator.

Output Growth

The increase in the amount of goods or services produced by an economy over a period.