Standard of Value

AAA

DEFINITION of 'Standard of Value'

An agreed-upon value for a transaction in a country's medium of exchange, such as the dollar or peso. A standard of value allows all merchants and economic entities to set uniform prices for goods and services. This standard is necessary in order to maintain a stable economy.

INVESTOPEDIA EXPLAINS 'Standard of Value'

Historically, gold has been used as a standard of value in many countries. The U.S. went off the gold standard domestically in 1934 and internationally in 1971. A floating rate of currency exchange is now used instead.

RELATED TERMS
  1. Arbitrage

    The simultaneous purchase and sale of an asset in order to profit ...
  2. Currency

    A generally accepted form of money, including coins and paper ...
  3. Money

    An officially-issued legal tender generally consisting of currency ...
  4. Bullion

    Gold and silver that is officially recognized as being at least ...
  5. Paper Money

    A country's official, paper currency that is circulated for transaction-related ...
  6. Debt Consolidation

    The act of combining several loans or liabilities into one loan. ...
Related Articles
  1. Currency Exchange: Floating Rate Vs. ...
    Forex Education

    Currency Exchange: Floating Rate Vs. ...

  2. The Currency Board: Understanding The ...
    Personal Finance

    The Currency Board: Understanding The ...

  3. Top 7 Questions About Currency Trading ...
    Forex Education

    Top 7 Questions About Currency Trading ...

  4. Using Double Tops And Double Bottoms ...
    Forex Education

    Using Double Tops And Double Bottoms ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center