ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The Gold Standard was a system under which nearly all countries fixed the value of their currencies in terms of a specified amount of gold, or linked their currency to that of a country which did so.

Detailed explanation-2: -The gold standard is a monetary system where a country’s currency or paper money has a value directly linked to gold. With the gold standard, countries agreed to convert paper money into a fixed amount of gold. A country that uses the gold standard sets a fixed price for gold and buys and sells gold at that price.

Detailed explanation-3: -In 1926, the gold bullion standard was established along with the introduction of a gold standard for the rupee. India’s paper money and gold reserves were combined and the central bank (RBI) was founded. Consequently, a currency backed by gold and sterling was formed by the Currency Act of 1927.

Detailed explanation-4: -In the simplest terms, the gold standard is a monetary system that ties a currency’s value directly with gold. Therefore, the currency can be exchanged for a set amount of gold and is guaranteed by the government.

Detailed explanation-5: -The Bretton Woods System is a set of unified rules and policies that provided the framework necessary to create fixed international currency exchange rates. Essentially, the agreement called for the newly created IMF to determine the fixed rate of exchange for currencies around the world.