Suppose that Patagonia is on a bimetallic standard, that is, both gold and silver coins circulate as currency. The face value of a gold coin is $30. The face value of a silver coin is $2. What is the likely effect of the discovery of substantial new deposits of silver deposits in the Andes Mountains?

Multiple Choice

• The will be no change in the circulation of gold and silver coins since their face values are fixed.

• None of the options.

• The market value of both gold and silver bullion will rise as people begin to hoard precious metals.

• Only silver coins will circulate.

• Only gold coins will circulate.