<P> A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold . Three types can be distinguished: specie, bullion, and exchange . </P> <Ul> <Li> In the gold specie standard the monetary unit is associated with the value of circulating gold coins, or the monetary unit has the value of a certain circulating gold coin, but other coins may be made of less valuable metal . </Li> <Li> The gold bullion standard is a system in which gold coins do not circulate, but the authorities agree to sell gold bullion on demand at a fixed price in exchange for the circulating currency . </Li> <Li> The gold exchange standard usually does not involve the circulation of gold coins . The main feature of the gold exchange standard is that the government guarantees a fixed exchange rate to the currency of another country that uses a gold standard (specie or bullion), regardless of what type of notes or coins are used as a means of exchange . This creates a de facto gold standard, where the value of the means of exchange has a fixed external value in terms of gold that is independent of the inherent value of the means of exchange itself . </Li> </Ul>

When is a country said to be on gold standard