Question

Between 1890 and 1914, the gold stock of the world doubled, but world prices fell during this time.

T/F

Answer 1

The statement regarding the doubling of the world's gold stock and the fall in world prices between 1890 and 1914 is true, highlighting the unique economic conditions of the period.

Step-by-step explanation:

The statement that between 1890 and 1914, the gold stock of the world doubled, but world prices fell during this time is True. Usually, an increase in the gold stock would lead to inflation as each unit of currency becomes less valuable; however, during this specific period, despite the doubling of the world's gold stock, technological advancements and increases in efficiency led to a decline in prices instead. The period was marked by significant economic change, including shifts to the gold standard and banking crises affecting the value of money and prices.

Answer 2

Between 1890 and 1914, the gold stock of the world doubled, but world prices fell during this time.

Step-by-step explanation:

Between 1890 and 1914, the gold stock of the world doubled, but world prices fell during this time. This statement is true.

During this period, countries were on the gold standard, meaning their currencies were backed by gold. As the demand for gold increased, the price of gold also increased. However, this did not translate into higher prices for goods and services because the money supply did not increase proportionally to the increase in gold stock.

Instead, there were other factors, such as improved production and transportation techniques, which led to an increase in the supply of goods and services. This increase in supply outpaced the increase in money supply, causing world prices to fall.