A Gold Standard Ensures a Long-Run Tendency Toward Price Stability

question 31

Multiple Choice

A gold standard ensures a long-run tendency toward price stability because

• A)gold is desirable
• B)gold is durable and storable
• C)the cost of producing an ounce of gold stays relatively constant overtime
• D)gold supply is directly related to consumer satisfaction

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Definitions:

Compounded Quarterly

A method of calculating interest where the interest earned is added to the principal amount at the end of each quarter, leading to interest on interest in subsequent periods.

Bank Account

A financial account maintained by a banking institution where a customer can deposit and withdraw money.

Deposit

Money placed into a financial institution or account for safekeeping or to earn interest.

Compounded Quarterly

A method of calculating interest where the interest earned is added to the principal at the end of every three-month period, subsequently increasing the amount on which future interest is computed.