What Was The Gold Standard?
• The gold standard refers to a system in which countries peg
currencies to gold and guarantee their convertibility
• the gold standard dates back to ancient times when gold coins were a
medium of exchange, unit of account, and store of value
• payment for imports was made in gold or silver
• later, payment was made in paper currency which was linked to gold
at a fixed rate
• in the 1880s, most nations followed the gold standard
• $1 = 23.22 grains of “fine” (pure) gold
• the gold par value refers to the amount of a currency needed to
purchase one ounce of gold