Under the gold standard, a country with a surplus in its balance of payments experienced a decline in its money supply and a drop in its price level.

Question

Quizplus · Accepted Answer

Under the gold standard, a country with a surplus in its balance of payments would actually experience an increase in its money supply, as gold inflows would lead to the creation of more domestic currency, potentially leading to a rise in the price level, not a drop.

Under the Gold Standard, a Country with a Surplus in Its