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Simple English definitions for legal terms
paper standard
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A quick definition of paper standard:
A paper standard is a type of monetary system where the currency is not backed by gold or other precious metals. It is based entirely on paper. This is different from the gold standard, where currency is convertible into gold.
A more thorough explanation:
Definition: A monetary system that is based entirely on paper currency and is not convertible into gold or other precious metals. This is in contrast to the gold standard.
Example: In the United States, the paper standard was adopted in 1971 when President Nixon ended the convertibility of the US dollar into gold.
Explanation: This means that the value of the US dollar is not backed by gold or any other precious metal, but rather by the faith and credit of the government. This can lead to inflation and other economic issues if not managed properly.