The Goldsmith's Ability to Create Money Was Based on the Fact

Multiple Choice

The goldsmith's ability to create money was based on the fact that

A) withdrawals of gold tended to exceed deposits of gold in any given time period.
B) consumers and merchants preferred to use gold for transactions, rather than paper money.
C) the goldsmith was required to keep 100 percent gold reserves.
D) paper money in the form of gold receipts was rarely redeemed for gold.