The
gold standard is a
monetary system in which the standard
economic unit of account is a fixed weight of
gold. Three distinct kinds of gold standard can be identified. The
gold specie standardis a system in which the monetary unit is associated with circulatinggold coins, or with the unit of value defined in terms of oneparticular circulating gold coin in conjunction with subsidiary coinagemade from a lesser valuable metal. The
gold exchange standardmay involve only the circulation of silver coins, or coins made ofother metals, but the authorities will have guaranteed a fixed exchangerate with another country that is on the gold standard, hence creatinga
de factogold standard, in that the value of the silver coins has a fixedexternal value in terms of gold that is independent of the inherentsilver value. The
gold bullion standardis a system in which gold coins do not actually circulate as such, butin which the authorities have agreed to sell gold bullion on demand ata fixed price.