key term - Gold standard

Definition

The gold standard is a monetary system where a country's currency or paper money has a value directly linked to gold. Countries following the gold standard set a fixed price for gold, and agree to buy and sell gold at that price, which determines the value of their currencies in foreign exchange markets.

Related terms

Bretton Woods Institutions: These are institutions created in 1944, including the International Monetary Fund (IMF) and the World Bank, aimed at overseeing the international monetary system and promoting economic stability and cooperation.

Floating Exchange Rate:

A system where the value of a currency is allowed to fluctuate according to foreign exchange market mechanisms without direct government control or intervention.

International Monetary Fund (IMF):

An international organization that aims to promote global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world