There are many definitions of "Gold Standard" though it is commonly referred to has a "representative currency".  This is where the amount of currency in circulation by a government is equal to amount of gold it possesses at its current price.   This effectively limits the amount of government spending to only the value of the gold supply it owns.  Governments will "suspend" the Gold Standard at times when it must incur abnormally large expenditures, such as in a time of war.  This usually results in currency inflation followed by a deflation once the suspension is lifted. 

The United States adopted the Gold Standard in 1834 and stayed on it, with various suspensions, until 1974 when the Richard Nixon permantly suspended the U.S. Gold Standard.  Click on the graph to the right to see how drastically inflation takes over.  Do you think we should get back on the Gold Standard?  Well, given the total of all gold ever known to be mined, the current per ounce trading price of around $1,000, and the total of all U.S. dollars in circulation of over $4.3 trillion, you would have to more than double the price of gold to more than $2,000 per ounce to get back on the Gold Standard.  Hmmm, now what would that do to world markets?