(A) lower (B) lower

(A) higher (B) lower

(A) lower (B) higher

(A) higher (B) higher

For a given stock of gold, a rise in real money supply can only occur if the price level declines.

Inflation is unlikely to emerge as a significant problem

No country needs to serve at the centre of this fixed exchange rate system

The monetary mechanism has credibility

silver was significantly overvalued with respect to gold at the official parity

silver was significantly undervalued with respect to gold at the official parity

sterling’s parity was not properly aligned with its price level and was undervalued

British official liabilities exceeded Britain’s gold reserves

gold was the fundamental standard of value based on the ability of the US to maintain the parity of $35 per ounce

it replaced sterling which had been the silver exchange standard

all central banks exchanged their foreign exchange reserves for gold to become members of the system.

gold could be exchanged between countries, all other capital was controlled.

sterling was overvalued and the French franc was undervalued leading to a loss of gold reserves by Great Britain

the growth of the global economy brought with it a demand for dollars to be held as international reserves that exceeded the US gold reserves

the World Bank was underfunded by member central banks.

it was too weak to survive simultaneous speculative attacks on the Italian and UK currencies in 1992