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imagine a simple economy of freedonia that uses gold as its currency ( only gold, not gold
backed paper). suppose that Fre...

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imagine a simple economy of freedonia that uses gold as its currency (.docx

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imagine a simple economy of freedonia that uses gold as its currency ( only gold, not gold backed paper). suppose that Freediona finds itself deeply in debt and that its creditors who all live in the country of Sylvania demand the repayment of debt in gold. what is likely to happen to price in Freedonia ?
Solution
Since Gold is being used as a Currency in Freedonia , the price of Gold will remain same.
Currency do not have demand and supply and price of an article is determined by the value it possesses in terms of currency of a Nation.Currency itself cannot be measured because it is already in the form of Currency and hence Gold Price will remain same.
.

imagine a simple economy of freedonia that uses gold as its currency ( only gold, not gold backed paper). suppose that Freediona finds itself deeply in debt and that its creditors who all live in the country of Sylvania demand the repayment of debt in gold. what is likely to happen to price in Freedonia ?
Solution
Since Gold is being used as a Currency in Freedonia , the price of Gold will remain same.
Currency do not have demand and supply and price of an article is determined by the value it possesses in terms of currency of a Nation.Currency itself cannot be measured because it is already in the form of Currency and hence Gold Price will remain same.
.

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imagine a simple economy of freedonia that uses gold as its currency (.docx

1. imagine a simple economy of freedonia that uses gold as its currency ( only gold, not gold backed paper). suppose that Freediona finds itself deeply in debt and that its creditors who all live in the country of Sylvania demand the repayment of debt in gold. what is likely to happen to price in Freedonia ? Solution Since Gold is being used as a Currency in Freedonia , the price of Gold will remain same. Currency do not have demand and supply and price of an article is determined by the value it possesses in terms of currency of a Nation.Currency itself cannot be measured because it is already in the form of Currency and hence Gold Price will remain same.