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82
T/F: The undervalued metal at the mint will circulate as money.
Why?
Why?
False - the metal over-valued at the mint (silver) is circulated as money and the under-valued metal at the mint is hoarded (gold)
Why?
The under-valued metal is not given enough value at the mint (duh), but that means on the market it has more value. So people hold on to gold like they would shares in a firm (as an investment) and spend the currency that isn't worth as much on the market. That's why the Bimetallic standard was essentially a mono-metallic standard in practice.
Why?
The under-valued metal is not given enough value at the mint (duh), but that means on the market it has more value. So people hold on to gold like they would shares in a firm (as an investment) and spend the currency that isn't worth as much on the market. That's why the Bimetallic standard was essentially a mono-metallic standard in practice.
Flashcard info:
Author: savhighsmith
Main topic: Economics
Topic: History of Economics
School / Univ.: UGA
City: Athens
Published: 12.10.2010