ECSENOMICS Hume's Four-Pronged International Adjustment Mechanism T219 Figure 29-7 America has balance-of- payments deficit America loses gold Britain gains gold American money British money supply declines supply increases Prices decline in America British prices rise Step 1: Deel Step 2: Rise in Step 3: Rise Step 4: Decline in in American exports of British exports ports of goods American goods imports of goods of goods American balance-of. British balance-of payments equilibrium payments equilibrium restored restored McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Hume’s Four-Pronged International Adjustment Mechanism T-219 Figure 29-7