Will this help or hurt the balance of payments situation

Reference no: EM13527528

Suppose Switzerland is on the gold standard and it maintains a strict ratio of gold in its vaults to money (Swiss francs) in circulation. Suppose that it runs a balance of payments deficit. What will happen to its overall money supply? What impact will this have on the Swiss economy (e.g. prices of goods and exports)? Will this help or hurt the balance of payments situation?

Reference no: EM13527528

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