Class XI, Principles of Economics, "Advantages of Gold Standard"

Advantages of Gold Standard

1. It is an objective system and is not subject to changing policies of the government or the currency authority.

2. It enables the country to maintain the purchasing power of its currency for a very large time.

3. It preserves and maintains the external value of the currency (rate of exchange) within narrow limits. It provide fixed exchanges which is great bourn to traders and investors.

4. It gives the advantages of an international foreign currency. It creates an international measure of value.

5. It inspires confidence and contributes to national prestige.