During the late nineteenth century, the gold standard was a subject of controversy. Why?
A) Businesses resented fixed exchange rates because of their inability to raise or lower prices.
B) Gold flows were erratic and resulted in a series of large economic swings—booms and busts.
C) Prices were stable and predictable, but profits fell.
D) Governments cheated on printing money, causing inflation problems all over the world.
Ans: B) Gold flows were erratic and resulted in a series of large economic swings—booms and busts.
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The Case in Point on "baldness and heart disease" suggests that by preventing baldness:
A) men can reduce the likelihood they will develop colon cancer. B) men are unlikely to influence their chances of having heart problems. C) men are likely to reduce their chances of having heart problems. D) men can live longer.
If quantity demanded for rice falls by 2% when price increases 8%, we know that the absolute value of the own-price elasticity of rice is:
a. 2.5. b. 0.25 c. 4.0 d. 0.40.