Under the price-adjustment mechanism,a trade-surplus nation would realize gold inflows,an increase in its money supply,and a loss of international competitiveness.

Question

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Under the price-adjustment mechanism, a trade-surplus nation would experience an increase in demand for its currency, which would lead to an appreciation of the currency. This would result in higher prices for its exports and a decrease in international competitiveness. The inflow of gold and an increase in the money supply are also likely outcomes of a trade surplus, but they do not directly impact international competitiveness.

Under the Price-Adjustment Mechanism,a Trade-Surplus Nation Would Realize Gold Inflows,an