Gold Standard

The Gold Standard is a monetary system where a country's currency is directly tied to a specific amount of gold. This means that the government can only issue currency if it has enough gold to back it up. The main benefit is that it limits inflation and promotes trust in the currency since it's based on a tangible asset. However, it can also restrict economic growth because it limits how much money can be in circulation. Most countries abandoned the Gold Standard in the 20th century, opting for more flexible monetary systems.