Question

Provide two reasons why you think the gold standard or the fiat system (our current system in the U.S.) would be better or worse for the future of the U.S. and/or the global economy. Next describe how you believe the current pandemic crisis could affect the International Monetary System and/or International Monetary Fund?

Answer 1

GOLD STANDARD OR FIAT SYSTEM of currency is a monetary system in which the price of the issuing commodity is uncomparable with any commodity which can be measured.the value of the fiat currency depends only upon the faith or belief on the issuing authority which may actually be the government body or a central bank.one of the major difference between the fiat money and commodity money is they donot show an intrinsic value at any instant of time.fiat money is based only on the credit of the economy.

intrinsic value is the minimum value a commodity posses or the decrease of its value at the time of crisis or increase in its value at the time of demand is the intrinsic value of the given product or commodity.

examples are gold has a value of 32000/- per tula in january of 2020,but now due to crisis in the gold reserves the value pegged to 38000/- per tula in august 2020.so its intrinsic value changes by 6000/-in a period of 8 months.but when compared to fiat system the currency issued will not have an intrinsic value which changes due to crisis,demand etc.

another example for fiat currency is dollar,poundsterling,euro but not always rupee because in developing countries it shows an intrinsic value as the value increases or decreases with trade of the country with other countries,but it is not the same with developed countries,they already have a well established monetary system and a system of trade with different types of nations,so these are the nations which we can be compared with. so these currencies one or another way act as a fiat currency.now u know about the fiat currency in deep but are there any benefits or defects in using this currency?

i myself think that there are many advantages and disadvantages to the overall economy in times.they

ADVANTAGES	DISADAVANTAGES
fixed value which can be altered by the governing body	no fixed value which changes with demand and supply
controlling its supply is easy when compared to any other commodity	cannot control its supply and demand as there will be a black market to reengage it.
has no intrinsic value and is not a tangable asset	has an intrinsic value and is a tangable asset (can be excahnged for value)
government or political body is the governing body to alter in time of crisis	no crisis can decrease its value beyond its true increase at any times.
less risk of its devaluation(only happens if the political body becomes instable)	high risk and can be changed any day irrsepective of the authority.(cannot etimate)

so finally in my perspective the fiat money is the regulatory money only if the government is free to regulate it at any instances during the crisis and if the political body is stable all the times with its policies and which can be prolonged for a longer period benefits the entire economy in many ways as it plays a keyrole in maintaining the stability in all occations with respect to the capability of the country.

IMF:international monetary fund is an international organisation which consists of 189 member countries.it works on maintaining global monetary cooperation and maintaining a hign level of financial stability with funding interms of the required fiscal policys requirements and benifits to the society.

as this was an organisation to maintain financial stability it has a greater role to play in this global crisis of the pandamic which effects 3/4 of the entire nations with a global shut down of inflows and outflows from or towards the other countries which maintain a high level of trade agreements.

so because of the pandemic the ongoing debts has incresed for many countries as their debt was grown a lot and a decrease in trade pacts and agreements results in loss or decease of outflows from other countries.but the government to carry on its works regarding sanitary measures,travelling budgets,infrastructure requirements,it should borrow funds as there is no service creation or revenue generation in any form.so there should be a government borrowing which means that if governement borrows from local money which will not be sufficient in any form,so it will go for international borrowings which leads an increase in debt of the entire country.so far there is a overall defecit and a long term affect to the poorest countries as their resourses are less to generate revenue and to clear the debts it may takes several years to become stabilised to improve their economy.while coming to developing countries thay may take a lot of time to clear the debts and to generate the revenue it is in terms of 5 years needed.according to imf it has issued 124bn to the emerging markets which becomes 3/4 given in the second quarter which in detail terms u the problem the pandemic has costed for the growth and development of the entire economy.

so i belive that there should be a lot of distress caused to various sectors like agricultural products demand increased ,pharmaceuticals becomes costlier,trade services becomes disputed as there is a need of income to both of countries which results in increase of constraints,service sector has a lot of increased demand dut to its offerings,so these may be the enough reasons and the effects the pandemic has costed the entire world of nations.