Under the gold standard, the price of an ounce of gold in U.S. dollars was $ 20.

ID: 2817489 • Letter: U

Question

Under the gold standard, the price of an ounce of gold in U.S. dollars was

$ 20.63$20.63,

while the price of that same ounce in British pounds was

pound 3.6819£3.6819.

What would be the exchange rate between the dollar and the pound if the U.S. dollar price had been

$ 42.98$42.98

per ounce of gold?

The implied

$/pound£

exchange rate if the U.S. dollar price is

$ 20.63$20.63/oz

of gold is

$5.603/pound£.

(Round to four decimal places.)The implied

$/pound£

exchange rate if the U.S. dollar price had been

$ 42.98$42.98/oz

of gold is

$11.674/pound£.

(Round to four decimal places.)

1) 1 ounce of gold = $20.63

1 ounce of gold = BP 3.6819

From above, we can say that -

BP 3.6819 = $20.63

or, BP 1 = $20.63 / 3.6819 = $5.6031

2) Same as above.

1 ounce of gold = $42.98

1 ounce of gold = BP 3.6819

or, BP 3.6819 = $42.98

or, BP 1 = $42.98 / 3.6819 = $11.6733

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