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If the United States and Britain Were Both on the Gold

Question 3

Multiple Choice

If the United States and Britain were both on the gold standard,trade would be brought into balance because


A) one country would eventually run out of gold.
B) both countries would eventually run out of gold.
C) as a country's gold balance declines, it would have to import more and more to compensate for the loss.
D) changes in the British and U.S. money supplies brought about by gold flows would cause their respective domestic price levels to change.
E) the country with the positive export balance would export gold to the country with the negative export balance, causing the imbalance to disappear.

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