ECONOMICS
MONEY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A system that uses actual gold coins as a country’s money
|
|
|
A system in which the country’s money is backed with gold
|
|
|
A currency system in which each dollar is worth 1/20th of a pound of gold
|
|
|
A money system in which the paper currency is good in more than one country
|
Detailed explanation-1: -gold standard, monetary system in which the standard unit of currency is a fixed quantity of gold or is kept at the value of a fixed quantity of gold. The currency is freely convertible at home or abroad into a fixed amount of gold per unit of currency.
Detailed explanation-2: -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-3: -Simply put, the gold standard is a system where nations agree on a common value of a commodity, in this case, gold. Therefore, the more gold a nation had, the more valuable its currency.
Detailed explanation-4: -No, money is not backed by gold, nor by any other commodity. It hasn’t been since 1971.
Detailed explanation-5: -All banknotes issued by RBI are backed by assets such as gold, Government Securities and Foreign Currency Assets, as defined in Section 33 of RBI Act, 1934. 1.