Suppose the United States decides to go back on the gold standard. This should
A) improve the Federal Reserve's ability to target inflation.
B) decrease the Federal Reserve's ability to pursue active monetary policy.
C) increase the effectiveness of expansionary monetary policy.
D) increase the effectiveness of contractionary monetary policy.
Question 2
During the German hyperinflation of the 1920s, the large increases in the money supply were generated by the German government
A) significantly raising the required reserve ratio to reduce business loans.
B) significantly lowering the required reserve ratio to enable German businesses to obtain loans.
C) selling large quantities of government bonds to the central bank, the Reichsbank.
D) printing large quantities of German marks.
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