International monetary system
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Transcript of International monetary system
International monetary system
Bimetallism standard
Monometallism standard
Paper standard
Commodity standard
Barter
Precious metals
Coins• Full bodied • Debased
Gold standard
Gold currency standard
Gold bullion standard
Gold exchange standard
Conditions for successful functioning
• No restriction on movement of gold
• Governments should no offset the effect of gold movements
• Central banks act as apex bodies to hold gold reserves
• Unrestricted minting and melting at the option of holder
Reasons for breakdown of gold standard
• Uneven distribution of gold USA and France had a bulk of it
• Some countries imposed restriction on trade
• World war in 1914 strained political relations between countries