Final answer:
The government could only issue currency equivalent to the amount of gold in its reserves under the gold standard, which guaranteed the currency's value but also limited economic growth.
Step-by-step explanation:
With the gold standard in place, the government could issue currency only if it had a corresponding amount of gold in its reserves. Essentially, the amount of currency in circulation was limited by the total value of gold reserves controlled by the government. Adopting the gold standard meant that countries agreed to convert paper money into a fixed amount of gold and restricted the issuance of currency to the amount of gold held by the government. This standard provided a guarantee of value for the currency but also restrained economic growth in times when gold reserves were not increasing at the same rate as the economy.