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Question 7 (20 marks) The Gold Standard contains a price-specie-flow mechanism which allows international trade and payment equilibrium between countries. (20 marks) Illustrate, by using

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Question 7 (20 marks) The Gold Standard contains a "price-specie-flow mechanism" which allows international trade and payment equilibrium between countries. (20 marks) Illustrate, by using flow diagrams, how the price-specie-flow mechanism works. Start your explanation with the situation that country X currently experiencing a balance of trade (BOT) surplus with value of her export greater than the value of her import (Ex > Im)

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