Under a gold standard,exchange rates
A) reflect balance-of-payments surpluses and deficits.
B) are set by the International Monetary Fund.
C) equal the amount of gold a nation needs to back its money.
D) are determined by the equation of exchange.
E) are effectively fixed.

Question

Quizplus · Accepted Answer

Under a gold standard, currencies were backed by gold and therefore had a fixed exchange rate. The value of a currency was determined by its value in gold, so exchange rates were effectively fixed.

Under a Gold Standard,exchange Rates