During the late nineteenth century, the gold standard was a subject of controversy. Why?
A) Businesses resented fixed exchange rates because of their inability to raise or lower prices.
B) Gold flows were erratic and resulted in a series of large economic swings—booms and busts.
C) Prices were stable and predictable, but profits fell.
D) Governments cheated on printing money, causing inflation problems all over the world.
Ans: B) Gold flows were erratic and resulted in a series of large economic swings—booms and busts.
You might also like to view...
A tax cut has a smaller impact on aggregate demand than an increase in government purchases of the same size because
A. A portion of the tax cut is saved. B. A portion of the tax cut is invested. C. The tax cut multiplier is equal to 1. D. Tax cuts do not increase disposable income.
Which of the following is likely to have the most inelastic price elasticity of demand?
A. Automobiles. B. Pickup trucks. C. The Hondas one Honda dealer sells. D. Hondas.
Which of the following correctly explains how expansionary monetary policy works?
A) G? ? C? ? Y? B) T? ? C? ? Y? C) M? ? i? ? I? ? Y? D) M? ? i? ? I? ? Y?
Upon which of the following industries is a restrictive monetary policy likely to be most effective?
A. Furniture. B. Clothing. C. Food processing. D. Residential construction.