Question

World War I caused the suspension of the gold standard for fixed international exchange rates because the war:

a. cost too much money.
b. interrupted the free movement of gold.
c. lasted too long.
d. used up too much gold by warring countries to buy armaments.

Answer 1

Option B, interrupted the free movement of gold, is the right answer.

Step-by-step explanation:

• A monetary system in which the standard economy unit is based on a fixed amount of gold is known as the Gold Standard.
• Throughout the Nineteenth and the Twentieth Century, many countries used this system of Gold Standard.
• With the end of 1913, the gold standard was at its zenith but the First World War caused many countries to abandon it.