Answer to Question #60663 in Finance for Doltsee

Question

Why Gold Standard is considered to be fixed
exchange rate regime?

Answer 1

A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold.
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.

That's why Gold Standard is considered to be fixed exchange rate regime.