During the gold standard era,central bankers agreed to react positively to international gold flows so as to reinforce the automatic adjustment mechanism.Which of the following best represents the above statement?
A) Income-adjustment mechanism
B) Price-adjustment mechanism
C) Rules of the game
D) Discretionary fiscal policy

Question

Quizplus · Accepted Answer

The statement is referring to the "rules of the game" that central bankers agreed upon during the gold standard era, which involved reacting positively to international gold flows to reinforce the automatic adjustment mechanism. This means that central bankers were committed to following a set of rules for managing their economies under the gold standard, rather than using discretionary fiscal policy or relying solely on either an income-adjustment or price-adjustment mechanism.

During the Gold Standard Era,central Bankers Agreed to React Positively