1342_IM_Word_docsM03_EITE1342_12E_IM_C03课件.docVIP

Chapter 3The International Monetary System (Questions 3-1. The Gold Standard and the Money Supply. Under the gold standard all national governments promised to follow the “rules of the game.” This meant defending a fixed exchange rate. What did this promise imply about a country’s money supply? A country’s money supply was limited to the amount of gold held by its central bank or treasury. For example, if a country had 1,000,000 ounces of gold and its fixed rate of exchange was 100 local currency units per ounce of gold, that country could have 100,000,000 local currency units outstanding.