Which of the following would be most likely to cause an increase in the demand for gold?
A) A decrease in the price of gold
B) The expectation of a future decrease in the price of gold
C) An increase in the price of gold
D) The expectation of a future increase in the price of gold
E) An increase in the supply of gold
D
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The currency of the United States is
a. backed dollar for dollar by gold b. backed dollar for dollar by GDP (that is, by goods) c. not backed by anything (neither gold nor fool's gold) d. backed by the government's currency reserves in the vaults at Fort Knox e. backed by gold only for coin, not for paper bills
If the U.S. government repaid its multitrillion debt by printing (i.e., creating) new money, the effect would be to:
a. Lower nominal interest rates. b. Increase aggregate demand, reduce unemployment, and reduce the nation's price level. c. Increase the real risk-free interest rate. d. Wildly inflate prices.