Under the gold standard of currency exchange that existed from 1879 to 1914, an ounce of gold cost $20.67 in U.S. dollars and £4.2474 in British pounds. Therefore, the exchange rate of pounds per dollar under this fixed exchange regime was:
A) £4.8665/$.
B) £0.2055/$.
C) always changing because the price of gold was always changing.
D) unknown because there is not enough information to answer this question.

Question

Quizplus · Accepted Answer

The exchange rate between pounds and dollars under the gold standard can be calculated by dividing the pound price of gold by the dollar price of gold:
£4.2474/$20.67 = £0.2055/$

Under the Gold Standard of Currency Exchange That Existed from 1879