Gold Standard was a prevalent system of exchange rate management during 1870 and 1914. Which of the following statements relate closely to gold standard.

(A) Epitome of fixed exchange rate system.

(B) Mixture of flexible and fixed exchange rate system.

(C) Central Banks intervene occasionally.

(D) Managed floating.

(E) All currencies were defined in terms of gold.

Choose the correct answer from the options given below :

(A) and (E) Only

The correct answer is option (3) : (A) and (E) Only

A) Epitome of fixed exchange rate system: True. Under the Gold Standard, currencies were pegged to a specific amount of gold, thereby fixing their exchange rates relative to gold.

(B) Mixture of flexible and fixed exchange rate system: False. The Gold Standard was primarily a fixed exchange rate system, where exchange rates were determined by the gold parity.

(C) Central Banks intervene occasionally: False. Under the classical Gold Standard, central banks had limited ability to intervene in currency markets because exchange rates were fixed by the gold standard.

(D) Managed floating: False. Managed floating refers to a system where exchange rates are allowed to fluctuate within a certain range, with occasional interventions by central banks. This does not describe the Gold Standard.

(E) All currencies were defined in terms of gold: True. One of the key features of the Gold Standard was that the value of each currency was directly linked to a specific quantity of gold.