After Britain returned to the Gold Standard in the 1920s,the British pound was
A)undervalued, contributing to a long period of inflation.
B)undervalued, contributing to a long period of recession.
C)overvalued, contributing to a long period of inflation.
D)overvalued, contributing to a long period of recession.
E) value about right, leading to a long period healthy growth with almost no inflation.

Question

Quizplus · Accepted Answer

After returning to the Gold Standard, the British pound was overvalued, which contributed to a long period of recession. This was because the overvalued currency made British exports more expensive, leading to a decline in exports and manufacturing. The resulting economic downturn lasted throughout the 1920s and contributed to the Great Depression in the 1930s.

After Britain Returned to the Gold Standard in the 1920s,the