Under a gold standard, countries should
A) keep the supply of their domestic money constant.
B) keep the supply of their domestic money fixed in proportion to their gold holdings.
C) keep the supply of foreign exchange less than their domestic money supply.
D) restrict the demand for foreign goods.
Question 2
Which of the following is a FALSE statement about the International Monetary Fund (IMF)?
A) The IMF was created after the Bretton Woods Conference to help to maintain the international fixed exchange rate system that was introduced.
B) The IMF lends to national governments, initially to maintain the fixed exchange rate system, and today to deal with debt or currency crises.
C) Multinational corporations can get IMF loans if they agree to invest in economies that are internationally perceived as risky and otherwise unlikely to receive direct foreign investment.
D) One of the criticisms of the IMF and other international governmental organizations that deal with the global economy is that their decision making may be biased toward policies that favor industrialized nations.
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