What are the advantages and the disadvantages of the gold standard and explain why the gold standard was abandoned.© BrainMass Inc. brainmass.com March 4, 2021, 8:40 pm ad1c9bdddf
In an international gold-standard system, gold or a currency that is convertible into gold at a fixed price is used as a medium of international payments. Under such a system, exchange rates between countries are fixed; if exchange rates rise above or fall below the fixed mint rate by more than the cost of shipping gold from one country to another, large gold inflows or outflows occur until the rates return to the official level. These "trigger" prices are known as gold points.
The gold standard was first put into operation in Great Britain in 1821. Prior to this time silver had been the principal world monetary metal; gold had long been used intermittently for coinage in one or another country, but never as the single reference metal, or standard, to which all other forms of money were ...
What are the advantages and the disadvantages of the gold standard and explain why the gold standard was abandoned.