Practice question · Match the pairs
Match each gold-standard concept to its meaning.
- Gold parity
- Convertibility
- Specie flow
- Rules of the game
- Anyone can exchange currency for gold
- Gold moves to settle trade imbalances
- Countries must contract when losing gold
- The fixed weight of gold per unit of currency
Hints
- Separate the fixed ratio from the promise to exchange.
- One term names the automatic adjustment mechanism between countries.
Show the answer
- Gold parity → The fixed weight of gold per unit of currency
- Convertibility → Anyone can exchange currency for gold
- Specie flow → Gold moves to settle trade imbalances
- Rules of the game → Countries must contract when losing gold
Why
Parity, convertibility, flow, and the rules, the four pillars of the gold standard.
Practise The Gold Standard and Globalization
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