Which of the following is one of the major reasons the gold standard was abandoned?
A) The increased flow of gold from the U.S. into foreign central banks.
B) The competitive devaluation of currencies during the Great Depression.
C) The strengthening of the U.S. dollar due to the rise in productivity levels in the United States.
D) The United States unilaterally announced that the dollar would not be convertible to gold.

Question

Which of the following is one of the major reasons the gold standard was abandoned? 
A) The increased flow of gold from the U.S. into foreign central banks. 
B) The competitive devaluation of currencies during the Great Depression. 
C) The strengthening of the U.S. dollar due to the rise in productivity levels in the United States. 
D) The United States unilaterally announced that the dollar would not be convertible to gold.

Quizplus · Accepted Answer

The competitive devaluation of currencies during the Great Depression made it difficult to maintain the gold standard. Countries were devaluing their currencies to make their exports more competitive, which led to an influx of gold out of the United States. This decreased the amount of gold available for backing the U.S. dollar and undermined the credibility of the gold standard. As a result, the gold standard was abandoned by many countries in the 1930s.

Which of the Following Is One of the Major Reasons