Under a gold standard,countries should

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Under a gold standard, countries should keep the supply of their domestic money fixed in proportion to their gold holdings. This means that the value of the currency should be tied to a specific amount of gold, and the central bank should be willing to exchange its currency for gold at a fixed rate. This helps to maintain price stability and prevent inflation. Keeping the supply of domestic money constant (choice A) may not be feasible in all situations, as the demand for money may fluctuate. Restricting the demand for foreign goods (choice D) is not a requirement under a gold standard, although countries may choose to do so in order to maintain a favorable balance of trade. Keeping the supply of foreign exchange less than their domestic money supply (choice C) may help to maintain a stable exchange rate, but is not a requirement under a gold standard.

Under a Gold Standard,countries Should