Standard of money is divided into two kinds, namely:1. Standard paper, is the financial system in which paper money acts as a medium of exchange or a legal tender and infinite, but is not redeemable for gold and silver in circulation bank2. Standard metal (Metalisme).
Standard metal (Metalisme) is divided into two, namely:a. Monometalisme (a metal), comprising: a single standard, which is a country uses its standard form of one piece of precious metal, gold can be as well as silver.b. Bimetallism: two metals, such as:1. Standard twin, is the standard currency using the two precious metals (gold and silver) jointly as standard money. In this standard will apply two kinds of comparisons of gold and silver, which are:- Comparison according to the government, in the form of cash- Comparison according to the market, in the form of gold bullion.
2. standard parallel, is the standard currency using the two precious metals (gold and silver) jointly as standard money, but the comparison is valid only one kind that is according to the market alone.3. limping standard, is the standard currency using gold and silver as standard money as a means to pay.
If a country uses a standard twin or bimetallism, then the country will apply Gresham's Law, which reads: "bad money will drive good money out of circulation".
Terms enactment of Gresham's Law:1) state that uses a standard twin2) Central Bank traded precious metals in the form of gold or silver3) People are given the freedom to forge and melt the gold and silver4) Comparison of gold and silver by the government and different markets.
