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. 



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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.