Under the gold standard,a country with a rising price level
A) must decrease the price of gold.
B) sees its currency appreciate.
C) imports more than it exports.
D) eventually runs out of gold.
E) has an inflow of gold.

Question

Quizplus · Accepted Answer

Under the gold standard, a country with a rising price level would attract an inflow of gold as people from other countries would exchange their currencies for gold in the country with the rising prices. The increased supply of gold in the country would then lead to an expansion of its money supply, which would help to stabilize prices.

Under the Gold Standard,a Country with a Rising Price Level