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Topic: Business
Number of pages / Number of words: 3 / 802
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How would this purchase affect the domestic money supply?

"The basic rule of the gold standard was a fixed amount of gold for each specific weight of gold. Paper currencies were redeemable into gold at any time. A nation's monetary reserves consisted of only gold. On an international level, importing and exporting gold was unrestricted...


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Paper currencies were redeemable into gold at any time. A nation's monetary reserves consisted of only gold. On an international level, importing and exporting gold was unrestricted. All balance of payments deficits were settled in gold" (Zurich, 2002, 4).

"In this way, gold had a disciplining influence on a national economy...


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