What Are The Advantages Of Bi-metallism?

The supporters of bi-metallism have advanced the following arguments in favor of this system.Stability of price level:If one metal say gold or silver, is used as money, it will not ensure price stability in the country, because when one metal exceeds or falls short of currency requirements, that leads to rising or falling prices in the country. In case of adoption of dual system, stability in the price level can be achieved easily.

If at one time, the total output of gold falls, the supply of silver can be decreased. Thus, we find that with the adoption of two metals as standard money, prices stability can be ensured.It is argued that if one metal say gold is used as currency by all the countries of the world, then the supply of that metal would fall short of the currency requirement of the whole. So they advocate the adoption of two standard metals as money.

Another advantage claimed for bi-metallism is that it helps in arresting the fall in the price of the value of depreciated metal.Bi-metallism facilities international trade because ratio of exchange between gold and silver can be established easily with all countries of the world which are no gold or silver standard.