What is the gold standard? What r the pros and cons of this method? Some people have suggested that we impose more tariffs and import quotas to reduce the large number of imports. Explain how quotas and tariffs work. Which is better, and why? ORG ONLY
The gold standard is an economic system where the value of currency is determined by the value of a certain amount of gold. Some of its advantages include the relative lack of inflation that occurs and fixed international exchange rates. Its disadvantages include the limits it sets on economic growth due to the scarcity of gold, and it has been blamed for ptolonging the great depression because the government could not manipulate the currency.
Quotas are limits on the amount of goods that can be brought into a country for trade. Tariffs are taxes places on imported goods. Tariffs are better because they let the markets determine the appropriate amount of goods needed while still providing an advantage to the home country.