Gold Standard
MEANING The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. With the gold standard , countries agreed to convert paper money into a fixed amount of gold. A country that uses the gold standard sets a fixed price for gold and buys and sells gold at that price. That fixed price is used to determine the value of the currency. For example, if the U.S. sets the price of gold at $500 an ounce, the value of the dollar would be 1/500th of an ounce of gold. FEATURES :- (i) The monetary unit is defined in terms of certain weight and fineness of gold. (ii) All gold coins are held as standard coins and considered unlimited legal tender. (iii) All other types of money (paper money or token money) are freely convertible into gold or equivalent of gold. (iv) There is unlimited coinage of gold at no cost. (v) There is free and unlimited melting of gold. (vi) Import and export of gold is freely allowed. (vii) The m...