What does gold standard stand for?
Understand the Problem
The question is asking for the meaning or definition of the term 'gold standard'. This generally refers to a monetary system in which the value of currency is directly linked to gold. Alternatively, it can refer to a benchmark or standard of excellence in a particular field.
Answer
Monetary system linking currency value to a fixed quantity of gold.
The gold standard is a monetary system where a country's currency value is directly linked to a fixed quantity of gold. The currency can be exchanged for a set amount of gold domestically or internationally.
Answer for screen readers
The gold standard is a monetary system where a country's currency value is directly linked to a fixed quantity of gold. The currency can be exchanged for a set amount of gold domestically or internationally.
More Information
Under the gold standard, the monetary unit is maintained at a fixed weight in gold, meaning the supply of money is limited by the amount of gold the country possesses. This system was widely used until the 20th century when it was replaced by fiat currency systems.
Tips
A common mistake is assuming the gold standard is still in use by major economies; it is not, as many have switched to fiat currency systems.
Sources
- What Is the Gold Standard? History and Collapse - Investopedia - investopedia.com
- Gold Standard - Econlib - econlib.org
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