Answer to Question #60663 in Finance for Doltsee

Question #60663
Why Gold Standard is considered to be fixed
exchange rate regime?
1
Expert's answer
2016-07-01T09:03:02-0400
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold.
The gold exchange standard usually does not involve the circulation of gold coins. The main feature of the gold exchange standard is that the government guarantees a fixed exchange rate to the currency of another country that uses a gold standard (specie or bullion), regardless of what type of notes or coins are used as a means of exchange. This creates a de facto gold standard, where the value of the means of exchange has a fixed external value in terms of gold that is independent of the inherent value of the means of exchange itself.

That's why Gold Standard is considered to be fixed exchange rate regime.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS