Elastic Currency
Elastic currency is a type of currency that is not fixed in its value and can fluctuate depending on the economic conditions of the country. It is a type of currency that is not backed by a commodity or gold standard, but instead is determined by the supply and demand of the currency in the market. This type of currency is also known as a floating currency or a flexible currency.
History of Elastic Currency
The concept of elastic currency was first introduced in the late 19th century by economist Alfred Marshall. He argued that the value of a currency should be determined by the supply and demand of the currency in the market, rather than by a fixed exchange rate. This idea was later adopted by the United States in the early 20th century, when the Federal Reserve began to use a flexible exchange rate system. This system allowed the value of the US dollar to fluctuate depending on the economic conditions of the country.
Since then, many countries have adopted a flexible exchange rate system, allowing their currencies to fluctuate in value depending on the economic conditions of the country. This type of currency system is often referred to as a floating exchange rate system or a flexible exchange rate system.
Comparison Table
| Type of Currency | Value |
|---|---|
| Fixed Currency | Fixed |
| Elastic Currency | Fluctuating |
Summary
Elastic currency is a type of currency that is not fixed in its value and can fluctuate depending on the economic conditions of the country. It is a type of currency that is not backed by a commodity or gold standard, but instead is determined by the supply and demand of the currency in the market. This type of currency system is often referred to as a floating exchange rate system or a flexible exchange rate system. For more information about elastic currency, you can visit websites such as Investopedia, The Balance, and the Federal Reserve Bank of New York.
See Also
- Fixed Currency
- Floating Exchange Rate
- Flexible Exchange Rate
- Currency Exchange Rate
- Currency Appreciation
- Currency Depreciation
- Foreign Exchange Market
- Currency Speculation
- Currency Hedging
- Currency Arbitrage
