Question

EOC 14.30 Homework Answered The goldsmith's ability to create money came from the discovery that O A withdrawals of gold tended to exceed deposits of gold in any given time period. O B consumers and merchants preferred to use gold for transactions, rather than paper money. o C the goldsmith was required to keep 100 percent gold reserves. O D paper money in the form of gold receipts was rarely redeemed for gold. Answered - Incorrect 1 attempt left Change your responses to resubmit

Answer 1

Answer:

The goldsmith's ability to create money was based on the fact that: paper money in the form of gold receipts was rarely redeemed for gold. When the receipts given by goldsmiths to depositors were used to make purchases: the receipts became in effect paper money.

Option D is correct.