Under an international gold standard, a ﬂow of gold from country A into country B would be halted by

Question

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Under an international gold standard, gold flows from countries with trade surpluses to those with trade deficits. This flow would be halted if prices and incomes rise in the receiving country (B) and fall in the sending country (A), as this would reduce B's competitiveness and increase A's, thereby correcting the trade imbalance that caused the gold flow.

Under an International Gold Standard, a ﬂOw of Gold from Country