--%>

Advantages and disadvantages of gold standard

Write the advantages and disadvantages of the gold standard.

E

Expert

Verified

Advantages of the gold standard involves: 

a) As supply of gold is controlled, countries do not have high inflation; 

b) Any of BOP disequilibrium may be corrected through the cross-border flows of the gold.

While, the major disadvantages of gold standard are as: 

a) The world economy may be subjected to the deflationary pressure due to restricted gold supply; 

b) The standard of gold itself does not have any mechanism for enforcing rules of game, and, consequently, countries can pursue economic policies which are incompatible with standard of gold.

   Related Questions in Financial Accounting

  • Q : Computing the credit rating List some

    List some of the factors does Standard & Poor’s analyzes in computing the credit rating it assigns a sovereign government?

  • Q : What is Triangular arbitrage What is

    What is meant by the Triangular arbitrage?  Explain about the condition which provides rise to opportunity of the triangular arbitrage?

  • Q : REDUMPTION OF DEBENTURS WHAT IS

    WHAT IS REDUMPTION? AND WHAT ARE THE CONDITIONS?

  • Q : Explain international Fisher effect

    Explain and also derive international Fisher effect.

  • Q : Need for valuing goodwill Need for

    Need for valuing goodwill: If the mutual rights of the partners modifies then the party which makes a sacrifice should be compensated. This basis of compensation is goodwill therefore we require calculating goodwill. Mutual rights change beneath follo

  • Q : What is Freight-in What is Freight-in

    What is Freight-in and what are its conditions?

  • Q : Restrictions of foreign equity ownership

    Describe various restrictions of foreign equity ownership.  Why countries impose these restrictions, explain your view on this?

  • Q : Whether MNC open their manufactoring

    For most global companies, China symbolizes a very attractive market in terms of size and growth-rate. Yet, it ranks lower in words of economic freedom and higher in political risk than other countries' markets because it has a communist government. Despite such risks

  • Q : Accouning Required parts are clearly

    Required parts are clearly describes at the end of the questions and additional resource contains the journal article related to question three.. Approx 2000 word assignment.. First Question is of not more than 1000 words to make memorandum and its example is given at end of assignment and require

  • Q : Characteristics of straight fixed-rate

    State the characteristics of the straight fixed-rate bond market instrument.