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Which of the Following Statement(s) Is Correct

Question 28

Multiple Choice

Which of the following statement(s) is correct?


A) A gold standard works well since a central bank doesn't have to control the money supply and there won't be any inflation or deflation, and a currency will maintain its value being backed by gold.
B) Under a gold standard, economic problems often arise with little control over the money supply and rises in gold production or circulation increasing the supply of currency in circulation leading to inflation and contractions in gold production or circulation leading to deflation and recession, leading to bank panics, with a scarcity of gold limiting the ability of an economy to grow.

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