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Assume That a Country Is Operating with a Gold Standard

Question 7

Multiple Choice

Assume that a country is operating with a gold standard and the domestic economy is growing rapidly. Which of the following effects would not be associated with this situation?


A) outflows of gold
B) a balance of payments deficit
C) a decline in the money supply
D) an increase in the money supply
E) a depreciation of the exchange rate

Correct Answer:

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