One well recognized benefit of a Gold Standard is Stable Prices leading to lower

Question

One well recognized benefit of a Gold Standard is Stable Prices leading to lowered purchasing power Stable Price Level supporting constant long-term purchasing power O inflexible money supply O strong property rights Question 16 1 pts During the Great Depression thousands of banks went under, much due to bank runs where people lost everything,. This caused a lack of trust in the banking system leading to the creation of the which sought to stabilize the banking system by building trust back in and reducing the fear of total financial loss. FDIC Medicare The SEC Social Security Administration

Explanation / Answer

a) "B"

A gold standard is where the currency is backed by the physical asset. So, only a limited currency can be printed. It discourages inflation and maintains the purchasing power of the currency. The answer is "Stable price level supporting constant long-term purchasing power".

b) "A"

FDIC was created to increase the people confidence in banks.

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