The gold standard is
A) a type of floating exchange rate system.
B) a type of managed flexible exchange rate system.
C) a type of fixed exchange rate system.
D) a currency exchange system without exchange rates.

Question

Quizplus · Accepted Answer

The gold standard is a type of fixed exchange rate system where the value of a country's currency is directly linked to gold. Under the classic gold standard, countries would fix the price of gold at a certain level and allow the exchange rate to adjust accordingly. This allowed for stable exchange rates between countries but restricted the ability of monetary policy to respond to economic conditions.

The Gold Standard Is