The price-specie-flow mechanism explains that imports will lead to less gold at home, resulting in less money supply

Question

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The price-specie-flow mechanism states that if a country imports more than it exports, it will have less gold flowing into the country. This will cause a decrease in the money supply as there is less gold to back up the currency. Therefore, imports will lead to less gold at home, resulting in less money supply.

The Price-Specie-Flow Mechanism Explains That Imports Will Lead to Less