Why don't economists agree with backing paper money with a certain commodity, such as gold? Supplies of commodities like gold can change ( expectedly, unexpectedly ). A sudden increase in the availability of a commodity could ( increase, decrease) the money supply too quickly and trigger inflation. If the government backed the currency with gold, then the money supply ( would, would not ) vary with the availability of gold. A persistent scarcity of a commodity could (increase , reduce ) the money supply too much and cause a recession and unemployment.

Why don't economists agree with backing paper money with a certain commodity, such as gold? Supplies of commodities like gold can change ( expectedly, unexpectedly ). A sudden increase in the availability of a commodity could ( increase, decrease) the money supply too quickly and trigger inflation. If the government backed the currency with gold, then the money supply ( would, would not ) vary with the availability of gold. A persistent scarcity of a commodity could (increase , reduce ) the money supply too much and cause a recession and unemployment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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