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Question
A gold standard is a monetary system wherein the exchange rate is determined by which of the following?
A gold standard is a monetary system wherein the exchange rate is determined by which of the following?
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Solution
The correct option is D The price of gold.
Gold standard
can refer to several things, including a fixed monetary regime under which the
monopoly government currency is fixed and may be freely converted into gold. It
can also refer to a freely competitive monetary system in which gold or bank
receipts for gold act as the principal medium of exchange; or to a standard of
international trade, wherein some or all countries fix their exchange rate
based on the relative gold parity values between individual currencies.
Gold standard can refer to several things, including a fixed monetary regime under which the monopoly government currency is fixed and may be freely converted into gold. It can also refer to a freely competitive monetary system in which gold or bank receipts for gold act as the principal medium of exchange; or to a standard of international trade, wherein some or all countries fix their exchange rate based on the relative gold parity values between individual currencies.
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