Question

explain the automatic mechanism by which BoP equilibrium was achieved under the gold standard

Answer 1

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Answer 2

The country form which we were importing and making payment in gold would face an increase in price and cost . there would be dis equilibrium.Normally,the BOP of the country with the favourite trade balance,until equilibrium in3international trade is re - established at relative prices that keeps Import in balance with no further net gold flows.Thus.....