Holding a currency to the gold standard:
A) helps savers at the expense of borrowers.
B) helps borrowers at the expense of savers.
C) hurts both savers and borrowers.
D) benefits both savers and borrowers.

Question

Quizplus · Accepted Answer

Holding a currency to the gold standard means that the value of the currency is tied directly to the value of gold. This can help savers, as the value of their savings will be more stable and not subject to inflation. However, it can hurt borrowers, as the value of their debts will be more difficult to pay off if the value of the currency remains stable or increases. Therefore, holding a currency to the gold standard helps savers at the expense of borrowers.

Holding a Currency to the Gold Standard