Which of the following was a reason that led to the collapse of the gold standard in 1939?
A)Difficulty and complexity in using the gold standard to determine the exchange rate
B)Agreement by governments to convert paper currency into gold on demand at a fixed rate
C)A cycle of competitive currency devaluations by various countries
D)Expansion in the volume of international trade in the wake of the Industrial Revolution
E)The inability of the gold standard to act as a mechanism for achieving balance-of-trade equilibrium by all countries

Question

Quizplus · Accepted Answer

With countries devaluing their currencies at will, one could no longer be certain how much gold a currency could buy. The net result was the shattering of any remaining confidence in the gold standard system. Instead of holding on to another country's currency, people often tried to change it into gold immediately, lest the country devalue its currency in the intervening period. This put pressure on the gold reserves of various countries, forcing them to suspend gold convertibility.

Which of the Following Was a Reason That Led to the Collapse