In the fourteenth century, the Western African Emperor Kankan Musa traveled to Cairo where he gave away much gold, which was in use as a medium of exchange. We would predict that this increase in gold

Question

Quizplus · Accepted Answer

When Emperor Kankan Musa gave away much gold in Cairo, it increased the supply of gold in the area. According to basic economic principles, an increase in the supply of a commodity, while demand remains constant, leads to a decrease in its value. In this context, the value of gold would decrease. Additionally, since gold was used as a medium of exchange, injecting more gold into the economy would increase the money supply, leading to inflation or an increase in the price level. Therefore, the correct prediction is that the action raised the price level and decreased the value of gold in Cairo.

In the Fourteenth Century, the Western African Emperor Kankan Musa