Question

Analyze the gold exchange system

Analyze the gold exchange system

Homework Answers

Answer #1

Gold exchange system allowed countries to convert money into fixed amount of Gold. Here the paper currency is directly linked to value of gold. The gold exchange system was implemented to curb the ill effects of inflation and deflation. In this system ther is fixed price of gold and they can be exchanged for paper currency.
The gold exchange system has been completely abolished by many countries. However it is used to settle transaction in certain cases.

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