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Question 2: 20 Points . Suppose a shock causes Britain's economy to contract. Explain why capital flowed in coun- tercyclical and stabilizing manner during the

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Question 2: 20 Points . Suppose a shock causes Britain's economy to contract. Explain why capital flowed in "coun- tercyclical and stabilizing" manner during the classical Gold Standard years of 1870-1913. Make sure to explain aloo how capital and trade flowe combined to stabilize the external accounts of Britsin and its periphery partners. . Explain the "procyclical and destabilizing" nature of capital flows during the interwar years

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