The gold standard is a type of floating exchange rate system. a type of managed flexible exchange rate system. a type of fixed exchange rate system. a purely floating exchange rate system.
The gold standard is a type of floating exchange rate system. a type of managed flexible exchange rate system. a type of fixed exchange rate system. a purely floating exchange rate system.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
The gold standard is
- a type of floating exchange rate system.
- a type of managed flexible exchange rate system.
- a type of fixed exchange rate system.
- a purely floating exchange rate system.
Expert Solution
Step 1
Exchange rate: It is the rate at which the value of one currency is exchanged for another currency.
Step 2
Gold Standard is the exchange rate that is fixed. Under this exchange rate, the government of the country fixed the exchange rate which can be converted into gold. The exchange rate is fixed by all the countries based on gold parity values between currencies of individual countries. Countries agreed to convert all their paper money into a fixed value of gold.
Therefore, the correct option is 3. A type of fixed exchange rate system.
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