Types of money Standard

Types of money Standard

1.    Commodity Standard

Commodity was first standard adopted by the world; however, it could not survive for number of limitation like durability, divisibility, storage issues.

2.    Metallic Standard

Metal were used as money standard and coins of copper & iron were designed and created by different countries. Scarcity on this metal was the basic governing idea to use as standard of money, but later with the development of mining scarcity was removed and it resulted in devaluing those coins.

3.    Bimetallism

Under bimetallism both Gold & silver coins were introduced and price of silver was established in relation to gold. It means silver and gold standard value was established and in accordance of this value either golf or silver coin were developed.

4.    Gold Standard

Under Gold Standard only gold coins were used for transaction both at domestic & international level. There were number of disadvantages associated with gold coins transport ability, chance of stolen, scarcity of gold.

5.    Representative Money

The age of representative money & currency notes started. In modern world representative money is used.