Under the gold standard, if the dollar price of gold is pegged at $35 per ounce and the dollar/euro exchange rate is set at $2.40 per euro, what must the euro price of gold be pegged at?
What will be an ideal response?
The euro price of gold is constant and equal to
($35 per ounce) / ($2.40 per euro) = 14.58 euro per ounce.
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