The gold standard

Question

The gold standard

Quizplus · Accepted Answer

The gold standard fell apart as the Great Depression spread and countries started to devalue their currencies to try to stimulate their economies. This ultimately led to the breakdown of the gold standard system. Thus, option C is the correct answer. Option A is incorrect as the gold standard worked well until the Great Depression. Option B is also incorrect as an increase in the world's gold supply does not necessarily mean that the gold standard will not work well. Option D is also incorrect as the gold standard may limit the flexibility of monetary policy.

The Gold Standard