1. This question refers to the gold standard. There were three periods of the gold standard: The 19th Century classical gold standard, the interwar gold standard, and Bretton Woods. Under the classical gold standard, international trade had little impact on inflation due to the price-specie-flow mechanism. For example, if Country A bought from Country B, then gold would be exported from A to B in order to settle payments. With reference to the quantity theory of money, why would this stabilize prices across countries? (20%)