Ask Question
8 March, 13:35

In the 1850s the French franc was valued by both gold and silver, under the official French ratio which equated a gold franc to a silver franc 15½ times as heavy. At the same time, the gold from newly discovered mines in California poured into the market, depressing the value of gold. As a result, A. the franc effectively became a silver currency. B. the franc effectively became a gold currency. C. silver became overvalued under the French official ratio. D. answers a) and c) are correct

+3
Answers (1)
  1. 8 March, 14:45
    0
    B) the franc effectively became a gold currency.

    Explanation:

    Before the price of gold plummeted, the French government could rely on bimetallism, but as the price of gold decreased and the value of silver remained the same, all you needed to do to earn some money was change your gold coins into silver coins (arbitrage). So the French government decided that it couldn't rely on the value of two different metals and chose gold.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “In the 1850s the French franc was valued by both gold and silver, under the official French ratio which equated a gold franc to a silver ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers