With an international gold standard,if a country ended up with a deficit from the balances on its current and capital accounts,it would:

Question

Quizplus · Accepted Answer

With an international gold standard, the exchange rate between countries is fixed as per the gold reserves held by each country. If a country has a deficit from the balances on its current and capital accounts, it means that it has imported more goods and services and invested more money abroad than it has exported and received in return. This would lead to a depletion of its gold reserves. In order to settle the balance, the country would need to export gold to other countries in return for foreign currency. Hence choice B is the correct option.

With an International Gold Standard,if a Country Ended Up with a Deficit