Chap002 36 - effectiveness of the mechanism depends on A....

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30. During the period between World War I and World War II, many central banks followed a policy of sterilization of gold A. by restricting the rate of growth in the supply of gold. B. by matching inflows and outflows of gold respectively with reductions and increases in domestic money and credit. C. by matching inflows and outflows of gold respectively with increases and reductions in domestic money and credit. D. none of the above. Topic: Evolution of the International Monetary System Topic: Interwar Period 31. The price-specie-flow mechanism will work only if governments are willing to play by the rules of the game by letting the money stock rise and fall as gold flows in and out. Once the government demonetizes (neutralizes) gold, the mechanism will break down. In addition, the
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Unformatted text preview: effectiveness of the mechanism depends on A. the income elasticity of the demand for imports. B. the price elasticity of the demand for imports. C. the price elasticity of the supply of imports. D. the income elasticity of the supply of imports. Topic: Evolution of the International Monetary System Topic: Interwar Period 32. During the period between World War I and World War II, the political reality was characterized by A. halfhearted attempts and failure to restore the gold standard. B. political instabilities and bank failures. C. panicky flights of capital across borders. D. all of the above Topic: Evolution of the International Monetary System Topic: Interwar Period...
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