During the period between World War I and World War II, many central banks followed a policy of sterilization of gold

Question

Quizplus · Accepted Answer

Sterilization of gold involves neutralizing the impact of gold inflows and outflows on the domestic money supply. This is done by matching inflows and outflows of gold respectively with reductions and increases in domestic money and credit, which is known as the policy of sterilization of gold. Option A is incorrect because restricting the rate of growth in the supply of gold would not necessarily neutralize its impact on the domestic money supply. Option C is opposite to the correct statement. Option D is incorrect because one of the options is correct.

During the Period Between World War I and World War