Define the following terms:1. Gold currency standard 2. Gold exchange standard 3. Gold bullion standard 4. Gold parity standard

1. Gold currency standard is the oldest type of gold standard. It's also called full gold standard. A country is on full gold standard when gold serves not only as a standard of value but also circulates as coins

2. Gold exchange standard is a gold standard for making foreign payments only. Inside the country people use token money. For making foreign payments the external value of the home currency is converted into gold and the currency authority of the home country is prepared to make available the foreign currency which is convertible to gold in exchange for home currency. Also when home country?s nationals receive payments from abroad in terms of foreign currencies, currency authority of the home country converts it into home currency.

3. Gold bullion standard, under this system the value of the currency is fixed in terms of gold by making such currency convertible into gold and vice versa. But gold here does not circulate like coins. What circulates is the legal tender (paper money and coins) not made of gold. This is a cheap standard of payment of standard to operate than the gold standard since it was not necessary to mint gold coins.

4. Gold Parity standard it is the latest to enter gold standard. This is the type of gold standard which is supposed to prevail under the International Monetary Fund. Under this system no gold coins are put into circulation. Gold does not serve as a mechanism of exchange. The internal currency consists of token money i.e. convertible paper money and coins which is not made of gold. Under this system gold bullions are not used and gold is only used in respect to IMF restrictions. The only respect in which gold comes into play under this system is that the currency authority takes upon itself the obligation of maintaining the exchange rate of the domestic currency stable in terms of a certain quantity of gold. These are the type of gold standard which the member countries of the IMF are supposed to have.

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Wilfykil answered the question on March 8, 2019 at 08:06