Author Question: Explain how exchange rate policies affected economies during the Great Depression. What will be ... (Read 90 times)

karlynnae

  • Hero Member
  • *****
  • Posts: 599
Explain how exchange rate policies affected economies during the Great Depression.
 
  What will be an ideal response?

Question 2

All individuals and firms in a country must gain from trade in order for it to be beneficial to the nation.
 
  Indicate whether the statement is true or false



Rilsmarie951

  • Sr. Member
  • ****
  • Posts: 316
Answer to Question 1

Many countries were on the gold standard at the beginning of the Great Depression. A gold standard requires that monetary authorities keep the stock of money in a constant ratio relative to the stock of monetary gold that the nation holds. This restricts the ability of a nation to use monetary policy. In 1931, it was widely expected that the United Kingdom would leave the gold standard altogether, and speculation turned against the pound. In September 1931, Britain left the gold standard and speculators immediately shifted their attention to the dollar. Expecting a similar decline in the value of the dollar, they began to sell dollars and dollar denominated assets, all of which resulted in gold outflows. The Fed was forced to respond by raising interest rates, and thus the U.S. economy continued its downward spiral. Countries that left the gold standard more quickly were able to use expansionary monetary policy sooner, and thus they recovered more rapidly. The U.S. did not leave the gold standard until after Roosevelt's election, and after that point, the economy began its recovery.

Answer to Question 2

FALSE



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

The training of an anesthesiologist typically requires four years of college, 4 years of medical school, 1 year of internship, and 3 years of residency.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

According to the CDC, approximately 31.7% of the U.S. population has high low-density lipoprotein (LDL) or "bad cholesterol" levels.

Did you know?

The human body's pharmacokinetics are quite varied. Our hair holds onto drugs longer than our urine, blood, or saliva. For example, alcohol can be detected in the hair for up to 90 days after it was consumed. The same is true for marijuana, cocaine, ecstasy, heroin, methamphetamine, and nicotine.

For a complete list of videos, visit our video library