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Chapter 20: Problem 15

The gold exchange standard was in effect from (LO3) a) 1900 to 1944 c) 1955 to 1980 b) 1944 to 1973 d) 1973 to the present

Short Answer

Expert verified
The gold exchange standard was in effect from 1900 to 1944, making option a) the correct answer.

Step by step solution

01

Identify the gold exchange standard time period

In order to solve the exercise, recall that the gold exchange standard is an economic system where countries agree to value their currencies in terms of gold. This means that countries would hold gold as a reserve to back their currencies and facilitate international trade. This system was operational in the early 20th century. Step 2:
02

Match the correct time period

Review the given options and determine the correct time period when the gold exchange standard was in effect. The correct answer is the period that falls within the early 20th century: a) 1900 to 1944 c) 1955 to 1980 b) 1944 to 1973 d) 1973 to the present Step 3:
03

Select the correct answer

Based on the information in Step 2, the correct time period for the gold exchange standard is: a) 1900 to 1944 Conclusion: The gold exchange standard was in effect from 1900 to 1944, making option a) the correct answer.

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Most popular questions from this chapter

In 2011 our net foreign debt was over \$ trillion. (LO4) a) 2 c) 6 e) 10 b) 4 d) 8

Today international finance is based on ( \(\mathrm{LO3})\) a) the gold standard b) mainly a relatively free-floating exchange rate system c) fixed rates of exchange

Today currency exchange rates are set mainly by (LO3) a) the International Monetary Fund b) the U.S. Treasury c) bilateral agreements between trading nations d) supply and demand

Which statement is false? (LO3) a) The gold standard will work only when the gold supply increases as quickly as the world's need for money. b) The gold standard will work only if all nations agree to devaluate their currencies simultaneously. c) The gold standard will work only if participating nations are willing to accept periodic inflation. d) The gold standard will work only if participating nations are willing to accept periodic unemployment.

Suppose the world was on the gold standard. If Peru ran persistent trade deficits, ( \(\mathrm{OO} 3)\) a) Peru would be able to continue doing so with no consequences b) Peru's money stock would decline, its prices would fall, and its trade deficit disappear c) Peru would soon suffer from inflation d) Peru would raise tariffs and prohibit the shipment of gold from the country
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