Under a gold standard, as trade takes place, the importing nation experiences a ________ and a(n) _________ in its money supply, while the exporting nation experiences the opposite.
A) gold outflow; contraction
B) gold inflow; expansion
C) gold outflow; expansion
D) gold inflow; contraction

Question

Quizplus · Accepted Answer

Under a gold standard, the importing nation pays for its imports with gold, leading to a gold outflow and a contraction in its money supply. Conversely, the exporting nation receives gold, experiencing an inflow and an expansion in its money supply.

Under a Gold Standard, as Trade Takes Place, the Importing