Given a common gold standard, the value of any currency in units of an

QUESTION

Given a common gold standard, the value of any currency in units of any other currency (the exchange rate) was easy to determine.

Indicate whether the statement is true or false.

ANSWER

TRUE
Pegging currencies to gold and guaranteeing convertibility is known as the gold standard. By 1880, most of the world’s major trading nations, including Great Britain, Germany, Japan, and the United States, had adopted the gold standard. Given a common gold standard, the value of any currency in units of any other currency (the exchange rate) was easy to determine.