BARTER SYSTEM Metallic Standard After the barter system and commodity money system, the modern money systems evolved. Among these, metallic standard is the premier one. Under metallic standard, some kind of metal- either gold or silver is used to determine the standard value of the money and currency. Standard coins made out of the metal are the principal coins used under the metallic standard.
These standard coins are full bodied or full weighted legal tender. Their face value is equal to their intrinsic metal value. Gold Standard The history of Barter system starts way back in BC n Barter system was introduced by Mesopotamia tribes. n Phoenicians adopted bartering of goods with various other cities across oceans.
n Babyloninan’s also developed an improved barter system, where goods were exchanged for goods. - - Monetary Economics Gold Standard is a system in which the value of the monetary unit or the standard currency is directly linked with gold. The monetary unit is defined in terms of a certain weight of gold. The purchasing power of a unit of money is maintained equal to the value of a fixed weight of gold.
Silver Standard The silver standard is a monetary system in which the standard economic unit of account is a fixed weight of silver. The silver standard is a monetary arrangement in which a country’s Government allows conversion of its currency into fixed amount of silver. Paper Currency Standard The paper currency standard refers to the monetary system in which the paper currency notes issued by the Treasury or the Central Bank or both circulate as unlimited legal tender. Paper currency is not convertible into any metal.
Its value is determined independent of the value of gold or any other commodity. The paper standard is also known as managed currency standard. The quantity of money in circulation is controlled by the monetary authority to maintain price stability. Plastic Money The latest type of money is plastic money.
Plastic money is one of the most evolved forms of financial products. Plastic money is an alternative