1.

Which of the following is not seen as an advantage of the gold standard?

A. For a given stock of gold, a rise in real money supply can only occur if the price level declines.
B. Inflation is unlikely to emerge as a significant problem.
C. No country needs to serve at the centre of this fixed exchange rate system.
D. The monetary mechanism has credibility.
Answer» B. Inflation is unlikely to emerge as a significant problem.


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