Money & Banking ,Evaluating Economic Performance, Government & the Economy. Be sure to remember to use...

Money & Banking ,Evaluating Economic Performance, Government & the Economy.

Be sure to remember to use economic evidence from the lesson to support your opinion.

1) Why did the U.S. abandon the Gold Standard?

2) How did the abandonment of the Gold Standard impact the U.S. dollar?

Expert Solution

Answer 1- US abandon the gold standard in order to combat the Great depression. In the year 1930 the US government found that they can do something to stimulate the economy. Judt to deter and depletion the cash deposit and gold supply US government had to keep the rate of interest high due to which it became very expensive for people and businesses to borrow. As a result of which in the year 1933 The president named Franklin D. Roosevelt had to cut the tie of dollar with the gold so that they get a chance to pump the economy and interest rates can be lowered

Answer 2 - the abandonment of gold standard help the US economy to grow further and to stimulate the economy. The exchange of gold with the paper money helped the US economy to increase its gold reserves due to which the US government increased the price of gold to around $35 per ounce which impact the US dollar as it help to increase the money supply in the economy .

Rahul Sunny answered 8 months ago

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