Numismatist: In medieval Spain, most gold coins were minted from gold

Question

Numismatist: In medieval Spain, most gold coins were minted from gold mined in West Africa, in the area that is now Senegal. The gold mined in this region was the purest known. Its gold content of 92 percent allowed coins to be minted without refining the gold, and indeed coins minted from this source of gold can be recognized because they have that gold content. The mints could refine gold and produced other kinds of coins that had much purer gold content, but the Senegalese gold was never refined.

As a preliminary to negotiating prices, merchants selling goods often specified that payment should be in the coins minted from Senegalese gold. Which one of the following, if true, most helps to explain this preference?

(A) Because refined gold varied considerably in purity, specifying a price as a number of refined-gold coins did not fix the quantity of gold received in payment.

(B) During this period most day-to-day trading was conducted using silver coins, though gold coins were used for costly transactions and long-distance commerce.

(C) The mints were able to determine the purity, and hence the value, of gold coins by measuring their density.

(D) Since gold coins’ monetary value rested on the gold they contained, payments were frequently made using coins minted in several different countries.

(E) Merchants obtaining gold to resell for use in jewelry could not sell the metal unless it was first refined.

yashikaaggarwal · Answer

Answer is considerably A,
Because of the refined gold varied considerably in purity, specifying a price as a number of refined-gold coins did not fix the quantity of gold received in payment.
The merchants demand coins minted by Senegalese Gold.

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ZZ800 · Answer

Why is C not correct. If we assume all Senegal coins are 92% then they are easily converted into value given the constant currency. Seems to offer a very valid reason why they would be preferred.

swapnils123 · Answer

Why is E not correct?
It is easy for merchants to reuse pure gold received from Senegal gold minted coins. No?

Navdeep2000 · Answer

Hey,

From my perspective, there's two reasons that this option is not correct - 
1. The question asks us why all the merchants often request payment to be made from Sen. gold. However, the option E specifies that "most" merchants prefer the same in order to resell it for the use in jewerly purposes. While it explains the reasoning for the most merchants, it doesn't answer why the rest of the merchants would still want the payment to be made in that particular kind of minted gold. 
2. Moreover, even if for a second, we assume that this option had addressed "all" instead of "most", this would still not be enough. Here's why - Option E states that "they could not sell the metal unless it was first refined". The passage nowhere mentions that "nearly" pure/refined gold would work in the situation, or to be more precise - 92% of purity would work as to resell it for the use in jewelry.

Verbal section answer choices has to be aligned word by word (not exactly the same word tho) with the information mentioned in the passage and that of the question demands i.e., every sentence should be true.

Thank you

Amalgum23 · Answer

GMATNinja  if you could help with this question

guddo · Answer

Numismatist: In medieval Spain, most gold coins were minted from gold mined in West Africa, in the area that is now Senegal. The gold mined in this region was the purest known. Its gold content of 92 percent allowed coins to be minted without refining the gold, and indeed coins minted from this source of gold can be recognized because they have that gold content. The mints could refine gold and produced other kinds of coins that had much purer gold content, but the Senegalese gold was never refined.
 
 As a preliminary to negotiating prices, merchants selling goods often specified that payment should be in the coins minted from Senegalese gold. Which one of the following, if true, most helps to explain this preference?

The key point is that merchants wanted payment in a coin whose gold content was  predictable and uniform . Senegalese gold coins were recognizable by their fixed 92 percent gold content, so specifying those coins would make the value of payment clearer before bargaining even started.

(A) Because refined gold varied considerably in purity, specifying a price as a number of refined-gold coins did not fix the quantity of gold received in payment.

This best explains the preference. If refined-gold coins varied a lot in purity, then saying “pay me in those coins” would leave uncertainty about how much gold the seller would actually receive. Senegalese coins, by contrast, had a known and consistent gold content.

(B) During this period most day-to-day trading was conducted using silver coins, though gold coins were used for costly transactions and long-distance commerce.

This gives background about when gold coins were used, but it does not explain why merchants preferred Senegalese gold coins in particular.

(C) The mints were able to determine the purity, and hence the value, of gold coins by measuring their density.

This does not explain the merchants’ preference. Even if mints could determine purity, merchants would still prefer a coin whose purity was already standard and predictable.

(D) Since gold coins’ monetary value rested on the gold they contained, payments were frequently made using coins minted in several different countries.

This is too general. It says why gold content mattered, but not why Senegalese coins were preferred over other gold coins.

(E) Merchants obtaining gold to resell for use in jewelry could not sell the metal unless it was first refined.

This does not explain the preference in ordinary payment negotiations and actually cuts against using unrefined Senegalese gold.

Answer: (A)

BongBideshini · Answer

But option C is not resolving the paradox. If it were easy to measure the density of  any  coin, then the varying purity of refined coins wouldn't be a problem. Then why would medieval merchants go out of their way to specify payment in  unrefined Senegalese gold coins  when they could have been paid in "much purer" refined gold coins?

Option A resolves the paradox because a Senegalese coin was  always 92% . It provided a  standardized value  that allowed for easier price negotiations.

Numismatist: In medieval Spain, most gold coins were minted from gold

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Numismatist: In medieval Spain, most gold coins were minted from gold

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