abhishreshthaa
Abhijeet S
1) Gold Bullion Standard:
The basis of money remains a fixed weight of gold but the currency in circulation consist of paper notes with the authorities standing ready to convert unlimited amounts of paper currency in to gold and vice-versa, on demand at a fixed conversion ratio.
Thus a pound sterling note can be exchanged for say ‘x’ ounces of gold while a dollar note can be converted into say ‘y’ ounces of gold on demand.
2) Gold Exchange Standard:
Gold Exchange Standard was established in order to create additional liquidity in the international markets. Hence the some of the countries committed themselves to convert their currencies into the currency of some other country on the gold standard rather than into gold.
The authorities were ready to convert at a fixed rate, the paper currency issued by them into the paper currency of another country, which is operating a gold specie or gold bullion standard. Thus, if rupees are freely convertible into dollars and dollars in turn into gold, rupee can be said to be on a gold exchange standard.
3) The Gold Standard:
This is the oldest system which was in operation till the beginning of the First World War and a for few years thereafter ie it was basically from 1870 - 1914.
The essential feature of this system was that the gouvernment gave an unconditional guarentee to convert their paper money to gold at a prefixed rate at any point of time or demand.
The basis of money remains a fixed weight of gold but the currency in circulation consist of paper notes with the authorities standing ready to convert unlimited amounts of paper currency in to gold and vice-versa, on demand at a fixed conversion ratio.
Thus a pound sterling note can be exchanged for say ‘x’ ounces of gold while a dollar note can be converted into say ‘y’ ounces of gold on demand.
2) Gold Exchange Standard:
Gold Exchange Standard was established in order to create additional liquidity in the international markets. Hence the some of the countries committed themselves to convert their currencies into the currency of some other country on the gold standard rather than into gold.
The authorities were ready to convert at a fixed rate, the paper currency issued by them into the paper currency of another country, which is operating a gold specie or gold bullion standard. Thus, if rupees are freely convertible into dollars and dollars in turn into gold, rupee can be said to be on a gold exchange standard.
3) The Gold Standard:
This is the oldest system which was in operation till the beginning of the First World War and a for few years thereafter ie it was basically from 1870 - 1914.
The essential feature of this system was that the gouvernment gave an unconditional guarentee to convert their paper money to gold at a prefixed rate at any point of time or demand.