Between 1879 and 1914 the world's major nations adhered to the gold standard under the gold standard a country maintained a fixed relationship between its stock of gold and its money supply. Suppose that Germany mark as 30 grains of gold and the United States defined $1 as 60 grains of gold 1. Under the gold standard a German mark would have been worth ( ans choices: 0.60, 1.2,2.0,0.50) US dollars.2. Suppose the fixed exchange rate is 0.50 per mark suppose that a recession in the United States leads to a reduction in imports from Germany. Shift the relevant curve or curves to illustrate the described changes then use the black pointed cross symbol to indicate the imbalance. GIVE EXACT POINTS that need to be graphed to note the change please! 3. A recession in the united states leads to a reduction in imports from Germany as a result the demand for German marks (decreases or increases) causing a _ million imbalance in the us balance of payments 4. Under the gold standard how is fixed exchange rate maintained in the face of the balance of payments imbalance show on the previous graph? A) the IMF must lend dollars to Germany with which to buy marks B) gold must flow from the United States to Germany C) the IMF must lend marks to the United States with which to buy marks. D) gold must flow from Germany to the United States

Between 1879 and 1914, the world's major nations adhered to the gold standard. Under the gold standard, a country maintained a fixed relationship between its stock of gold and its money supply. Suppose that Germany defined a German mark as 30 grains of gold, and the United States defined $1 as 60 grains of gold. Under the gold standard, a German mark would have been worth U.S. dollars. Suppose the fixed exchange rate is $0.50 per mark. Suppose that a recession in the United States leads to a reduction in imports from Germany. On the following graph, shift the relevant curve or curves to illustrate the described changes. Then use the black points (cross symbol) to indicate the imbalance. 1.00 Supply for marks Demand for marks 0.75 Supply for marks PRICE OF A MARK (In Dollars) 0.50 The Imbalance 0.25 Demand for marks 12 16 QUANTITY OF MARKS (Millions) A recession in the United States leads to a reduction in imports from Germany. As a result, the demand for German marks causing a