Business, 29.10.2019 00:31 choiboiqg2187

Under the gold standard the fixed price of gold was $20.67 per ounce in the united states. the fixed price of gold was £4.2474 per ounce in britain.
a. what is the "fixed" exchange rate (dollars per pound) implied by these fixed gold prices?
b. how would you arbitrage if the exchange rate quoted in the foreign exchange market were $4.00 per pound? (under the gold standard, you could buy or sell gold with each central bank at the fixed price of gold in each country.)
c. what pressure is placed on the exchange rate by this arbitrage?

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Under the gold standard the fixed price of gold was $20.67 per ounce in the united states. the fixed...

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