A gold standard therefore is a monetary system in which the economic unit of account is based ...........

Economic Affairs Money Supply and Monetary Policy

A gold standard therefore is a monetary system in which the economic unit of account is based on fixed quantity of gold according to this situation which of the following statement is correct:

1. The gold specie standard is associated with the value of circulating gold coins or the monetary unit of total number of currency in terms of gold coin.

2. In gold standard system ,gold in a floating exchange rate system a country's currency has a value with respect to demand or sypply of other countries of the world.

3. First time United states adopted gold standard system.

Choose the correct statement using code given below:

1 and 2 only

2 only

1 and 3 only

None of these

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Explanation:

A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. Three types can be distinguished: specie, bullion, and exchange.
-In the gold specie standard the monetary unit is associated with the value of circulating gold coins or the monetary unit has the value of a certain circulating gold coin, but other coins may be made of less valuable metal.
-The gold bullion standard is a system in which gold coins do not circulate, but the authorities agree to sell gold bullion on demand at a fixed price in exchange for the circulating currency.
-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.
-A formal gold specie standard was first established in 1821, when Britain adopted it following the introduction of the gold sovereign by the new Royal Mint at Tower Hill in 1816.