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Author Question: Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible. ... (Read 66 times)

bcretired

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on: Jun 30, 2018
Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible.
 
  What will be an ideal response?

Question 2

Most tariffs around the world are collected on an ad valorem basis.
 
  Indicate whether the statement is true or false


joewallace

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Since specie inflows drive up domestic prices and restore equilibrium in the balance of payments, any surplus eventually eliminates itself. A shortage of currency leads to low domestic prices and a foreign payments surplus, and any deficit eventually eliminates itself.

Answer to Question 2

TRUE


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