The great strength claimed for the gold standard was that it contained a powerful mechanism for achieving _____ by all countries.

Question

Quizplus · Accepted Answer

The gold standard system, which was used before the 1930s, required countries to fix their currencies to a specific amount of gold. This meant that a country's money supply was tied to the amount of gold it held, and therefore, a country couldn't print more money than the amount of gold it possessed. This system encouraged countries to balance their trade because if they imported more goods than they exported, they would have to pay for the deficit in gold. Thus, the gold standard was believed to achieve balance-of-trade equilibrium among all countries.

The Great Strength Claimed for the Gold Standard Was That