Which of the following is true of the gold standard as the international monetary system?
A)The gold standard allowed countries to observe lax monetary policies.
B)The volume of paper currency could not exceed the gold reserves.
C)The countries could just print money to combat economic downturns.
D)The gold standard provided for the devaluation of the currency to prevent the large-scale economic downturn.
E)The gold standard tied the currencies of all the countries to the U.S.dollar.

Question

Quizplus · Accepted Answer

The gold standard required that the amount of paper currency in circulation be backed by gold reserves, limiting the volume of money that could be printed and ensuring that countries maintained disciplined monetary policies.

Which of the Following Is True of the Gold Standard