The great strength claimed for the gold standard was that it contained a powerful mechanism for simultaneously achieving a(n)_______________ for all countries.
A) balance-of-trade equilibrium
B) economic stability
C) interest rate parity
D) equal tariff levels
E) currency convertibility

Question

Quizplus · Accepted Answer

The gold standard ensured that the value of a country's currency was tied to a fixed amount of gold, which helped to promote balance-of-trade equilibrium between trading nations. This meant that countries would not be able to run persistent trade deficits or surpluses, as any imbalances in trade would result in a corresponding inflow or outflow of gold. Thus, the gold standard provided a mechanism for maintaining economic stability across countries.

The Great Strength Claimed for the Gold Standard Was That