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Under a Gold Standard,if the U

Question 95

Multiple Choice

Under a gold standard,if the U.S.has a trade deficit with Japan,

A) the U.S.would receive gold from Japan,the Japanese money supply would decline,and the price level would fall in Japan.
B) the U.S.would receive gold from Japan,the U.S.money supply would increase,and the U.S.price level would rise.
C) the U.S.would lose gold to Japan,the U.S.money supply would increase,and the price level in the U.S.would increase.
D) the U.S.would lose gold to Japan,the U.S.money supply would decline,and the U.S.price level would fall.
E) the U.S.would lose gold to Japan,the Japanese money supply would decline,and the price level in Japan would fall.

Correct Answer: