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If the Demand for Traded Goods Is Price-Inelastic, the Price-Specie-Flow

Question 4

Multiple Choice

If the demand for traded goods is price-inelastic, the price-specie-flow mechanism will Result in


A) gold movements between countries that remove trade deficits and surpluses.
B) gold movements between countries that worsen trade deficits and surpluses.
C) negligible movements of gold between countries and hence little or no adjustment of Trade deficits and surpluses.
D) a removal of the basis for trade between countries.

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