Asked by Jorge Ayala on Jul 25, 2024
Verified
Under the international gold standard, exchange rates fluctuate without restraint to correct any international disequilibrium by affecting the relative attractiveness of domestic and foreign goods.
International Gold Standard
A monetary system in which the value of a country's currency is directly linked to a specified amount of gold, facilitating international trade and investment by establishing exchange rates based on gold parity.
Exchange Rates
The value of one currency for the purpose of conversion to another.
- Explain the mechanisms of the international gold standard and its effects on exchange rates.
Verified Answer
LH
lynnique henryJul 29, 2024
Final Answer :
False
Explanation :
Under the international gold standard, exchange rates were fixed, not fluctuating, as countries agreed to convert their currencies into a specific amount of gold. This system aimed to provide stability in international transactions by maintaining fixed exchange rates.
Learning Objectives
- Explain the mechanisms of the international gold standard and its effects on exchange rates.