Chat with AIExam 20: The Giant Economy and Its International Relations
Trade with the United States during the late 19th and the first half of the 20th century benefited those individuals living in less developed countries by
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Explain why goals to eliminate a current account deficit require deflation and why current account surpluses encourage inflation under the gold standard.
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Answered by Examlex AI CopilotUnder the gold standard, a country's currency was backed by a specific amount of gold, and international trade balances were settled in gold. This meant that a country with a current account deficit, meaning it was importing more goods and services than it was exporting, would have to pay for the difference in gold. In order to do so, the country would need to deflate its economy, meaning it would need to reduce domestic consumption and investment in order to reduce imports and increase exports. This would lead to a decrease in the money supply and a decrease in the price level, ultimately helping to eliminate the current account deficit.
On the other hand, a country with a current account surplus, meaning it was exporting more than it was importing, would receive gold in exchange for its exports. This increase in gold reserves would lead to an increase in the money supply and an increase in the price level, ultimately leading to inflation.
In summary, under the gold standard, the need to settle trade balances in gold meant that countries with current account deficits would need to deflate their economies to eliminate the deficit, while countries with current account surpluses would experience inflation due to the increase in their gold reserves.
During the postbellum period of U.S.history,
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For the gold standard to achieve its maximum functioning efficiency,central banks should theoretically play the "rules of the game." What are these rules?
(88) Where was the largest market for the huge increase in U.S.manufacturing output in 1860-1910 located?
(68) The long-term pattern of American foreign trade policy from 1789 to 1914 was
(68) For the late 19th and the first half of the 20th century,which of the following did NOT occur?
(74) During the entire period of 1820-1920,there were persistent trends in the structure of American foreign trade.They exhibited
(76) Operation on the basis of comparative advantages implies which of the following?
(73) Under the gold standard,a country experiencing a fall in its gold reserves was supposed to:
(81) Tariff rates remained high in the U.S.throughout the postbellum period for which of the following reasons?
(87) International trade was not important to the industrializing U.S.since it was relatively rich in raw materials and land.
(76) Between 1821 and 1930,the U.S.gained a comparative advantage in the production of agricultural goods.
(75) Consumers of most goods usually experience diminished satisfaction in each additional unit consumed.However,when variety appears endless,this may not be the case.Consider manufactured goods between 1890 and 1910.
(79) The big current-account deficits in the late 1880s and early 1890s were financed primarily by
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