Statement I: Strict adherence to the gold standard would render monetary policy utterly ineffective.
Statement II: We were on the gold standard until 1987.

Question

Quizplus · Accepted Answer

Statement II is false. The United States officially removed itself from the gold standard in 1971 with the Nixon Shock, not in 1987. However, Statement I is true as adherence to the gold standard prevents a country from controlling its money supply and adjusting interest rates, which are key tools of monetary policy.

Statement I: Strict Adherence to the Gold Standard Would Render