After Britain returned to the Gold Standard in the 1920s, the British pound was:
A) undervalued, contributing to a long period of inflation.
B) overvalued, contributing to a long period of recession.
C) overvalued, contributing to a long period of inflation.
D) undervalued, contributing to a long period of recession.
E) valued about right, leading to a long period of healthy growth with almost no inflation.

Question

Quizplus · Accepted Answer

The British pound was overvalued when Britain returned to the Gold Standard in the 1920s, which made British goods more expensive abroad and reduced competitiveness, contributing to a long period of recession.

After Britain Returned to the Gold Standard in the 1920s