Answered

Which of the following is the basis for the value of U.S. currency?

A. Gold stored by the U.S. government
B. People's acceptance of it for exchange
C. Its expensive production methods
D. A guarantee from foreign investors



Answer :

GinnyAnswer

Final answer:

The gold standard versus a floating currency system and the potential impact of foreign cash-in on the U.S. economy.


Explanation:

The fundamental differences between a currency based on the gold standard and one allowed to float:

  1. Gold Standard: Currency's value tied to a specific amount of gold reserve.
  2. Float System: Currency's value determined by supply and demand in domestic and international markets.

If foreigners decided to 'cash in' their dollars today, the U.S. might face currency devaluation and potential economic instability.


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