Statement I: A de facto dollar standard exists in many parts of the world.
Statement II: Adherence to the gold standard would render monetary policy utterly ineffective.

Question

Quizplus · Accepted Answer

Statement I is true because the US dollar is widely used as a reserve currency and for international transactions, creating a de facto dollar standard. Statement II is true because under a gold standard, the money supply is tied to the amount of gold a country possesses, limiting the government's ability to use monetary policy to influence the economy.

Statement I: a De Facto Dollar Standard Exists in Many