Why did the classical gold standard come to an end? *

a. The Civil War

b. The Spanish-American War

c. World War I

d. World War II

Which of the following is NOT an advantage of the classical gold standard: *

a. It was governed by clear and predictable rules

b. Governments could easily inflate away their debts

c. It allowed a higher level of trade to occur

d. It made borrowing between governments more reliable

According to the price-specie flow mechanism, if prices differ across nations: *

a. gold will move to bring prices into international equilibrium

b. gold will move to exacerbate the disequilibrium

c. gold will be abandoned in nations where it is less valuable

d. substitutes will be found for gold in nations where it is more valuable in use

The “gold points” concept explained why prices could differ by small amounts between nations. This occurred because: *

a. Arbitrageurs did not exist at this time

b. It was considered desirable to have price discrepancies

c. it was expensive to ship gold from one nation to another

d. it was cheap to ship gold from one nation to another

If a bank under the classical gold standard was short on reserves, it could attract gold from abroad by: *

a. raising domestic prices

b. curtailing its exports

c. lowering its discount rate

d. raising its discount rate