Gold standard
The gold standard is a monetary system where the currency of a country is converted directly into gold. Countries that apply the gold standard in the currency set a particular price that they sell and buy the gold. The gold standard type of currency was mainly used in the 19th and partly 20th centuries. All domestic currencies were converted into fixed amounts of gold that could be used in the market to purchase goods. However, the use of gold standards was abandoned and the world started using dollars.
The reason for elimination was because the countries were unable to increase gold in reserves to match the money in circulation. Gold standards limited the amount of money that the government pumped in the economy because of the low gold amount in banks. During the America Great Depression, the interest rates had gone very high which discouraged citizens to get loans for their business. The president in 1933 cut the links between gold and dollar which resulted to lower interest rates (Lomas & Godfrey, 2017).
Reference
Lomas, D. J., & Godfrey, E. (2017). Pearls and Pitfalls in Gold Standards and Biological Correlation. In Imaging Biomarkers (pp. 139-152). Springer, Cham.