Between 1880 and 1913,the gold standard stabilized exchange rates
A) but at the price of modest external price instability.
B) as well as domestic prices.
C) but at the price of substantial domestic price instability.
D) and neutralized potential political conflict caused by falling domestic prices.
E) until bimetallic standards were re-established after WWI.

Question

Quizplus · Accepted Answer

The gold standard did stabilize exchange rates but led to significant domestic price instability, as countries adhering to the gold standard had limited ability to adjust their monetary policies to respond to domestic economic conditions. This often resulted in economic fluctuations and price instability within countries.

Between 1880 and 1913,the Gold Standard Stabilized Exchange Rates