Statement I: The gold standard will not work well when the world's gold supply does not increase as quickly as the world's need for money.
Statement II: The years the world used the gold standard were the closest the world has ever come to having an international currency.

Question

Quizplus · Accepted Answer

Statement I is true because the gold standard relies on gold reserves to back currency value, and if gold supply doesn't increase with economic growth, it can lead to deflation and economic stagnation. Statement II is true because during the period the gold standard was in use, it provided a uniform measure of value across different countries, facilitating international trade and investment, making it the closest thing to an international currency.

Statement I: the Gold Standard Will Not Work Well When